General Electric Feels the Pain

Conglomerate reports weak income in first quarter.

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General Electric's Chief Executive Jeff Immelt has a lesson for America's businessmen: Don't underestimate the problems in the current economy. In an interview on CNBC this morning, Immelt said, "We thought we were going into this year on a conservative basis. Obviously, we weren't conservative enough." GE's first-quarter net income plunged 5.8 percent from the year-ago quarter, it reported today. The biggest problems seem to be in the company's financial services wing, where in its consumer and small-business finance unit, earnings dropped 19 percent, and in its commercial-finance business unit, where they dropped 20 percent. But GE's performance on the international scene stayed strong, with global revenue increasing 22 percent, and 38 percent of that is coming from developing countries.