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 Instead, he found himself defending the company's business model after GE shocked investors with lower-than expected earnings and a profit warning that wiped $46.9 billion off GE's value and sent the overall market slumping.
Fairfield-based GE, which typically hits its targets, reported that profit fell 6 percent, to $4.3 billion, or 43 cents per share, from $4.57 billion a year earlier. Earnings from continuing operations came to $4.4 billion, or 44 cents per share, down 8 percent.
That was well below the 51 cents per share expected by analysts surveyed by Thomson Financial for profit from continuing operations. The company itself had forecast a profit of 50 cents to 53 cents per share.
GE shares tumbled nearly 13 percent to end the day at $32.05, with about seven times as many shares traded as normally change hands.
The company blamed disruptions in its financial business late in the quarter for its inability to advise Wall Street in advance about the deterioration in its earnings. Executives faced tough questioning from analysts in a conference call.
Steve Tusa, an analyst at JPMorgan, told GE executives that "it makes it hard for investors, especially in this environment, to have conviction, I think, that you guys really are a safe, reliable growth company
- which is kind of the core of the value proposition you guys have put forth to the investment community."
Immelt blamed the financial service market for part of the trouble and defended GE.
"I think clearly we are in an unprecedented area, vis-a-vis what we have seen in March and at the end of the day, our earnings
- I'm not giving an excuse - our earnings being down 20 percent vs. the industry are still reasonably strong and so I think our business model is still strong," he said.
Scott Davis of Morgan Stanley, however, said GE's business model may need work.
"You have underperformed in the up cycle and now you are on pace to underperform in the down cycle," he told company officials.
Immelt said in GE's annual report, issued less than a month ago, that the conglomerate would outperform the Standard & Poor's 500 Index this year.
On Friday, GE lowered its outlook for earnings from continuing operations to between $2.20 and $2.30 per share for the full year, to account for an expected 5 percent to 10 percent decline in financial services profit. The company had projected earnings from continuing operations of at least $2.42 a share in 2008, and analysts had expected $2.43.
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 For the fiscal second quarter, GE forecast earnings per share of 53 cents to 55 cents. Analysts had predicted 58 cents.
Immelt said financial services deteriorated sharply in late March after the near-collapse of Bear Stearns. GE officials also said the quarter's weak results were due to the continued shutdown of a Salt Lake City medical manufacturer that contributed to a 17 percent decline in its health care business.
In addition, softness in the retail sector hurt GE appliance sales.
GE's infrastructure business, which makes train locomotives, water treatment plants and other large products, again generated strong revenue and profits. The unit, which has been a consistent money maker for GE, produced a revenue gain of 23 percent for the quarter and profit was up 17 percent.
"Typically, with GE you get one or two businesses that outperform and one or two that underperform," said analyst Matt Collins at Edward Jones in St. Louis. "In the end, it turns out to be balanced."
This quarter, however, four of six businesses were below expectations "and infrastructure was not enough to make up for the difference," he said.
Goldman Sachs analyst Deane M. Dray downgraded GE shares to neutral, saying in an investor note that he expects the "magnitude and timing of GE's miss and sharply lower 2008 guidance to shake investor confidence" and that it "raises credibility concerns for GE."
Nigel Coe, an analyst at Deutsche Bank Securities Inc., also downgraded GE to hold.
To keep a buy rating, "we would need to see a clear roadmap for the stock to return closer to the $40 level," he said in an investors note, but called the outlook "extremely cloudy."
Collins of Edward Jones said GE will be under intense pressure to deliver on expectations for the rest of the year.
"GE was viewed as a dependable performer until this morning," he said.
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On the Net: http://www.ge.com
[Associated Press; By STEPHEN SINGER]
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