General Electric Co on Thursday posted first-quarter profit growth that met Wall Street's expectations, but investors were disappointed the company did not raise its 2006 outlook.
Although GE said it remained on track to hit growth targets for the rest of the year, its shares were slightly lower in midday trade, as some were discouraged that GE left the earnings view unchanged.
"If everything is so great at GE right now, why didn't they move guidance?" said Rob Gowen, an investment analyst at BB&T Asset Management in Raleigh, North Carolina.
"I'm sure people wanted to see some upward guidance on that top line," Gowen said. Last week, 3M Co raised its forecast for first-quarter sales and earnings growth.
GE - which has a financing arm and manufactures goods including plastics, health care products and jet engines - said its profit increase was helped by higher earnings in each of its segments except for media business, NBC Universal.
The loss in the media unit reflected the costs of broadcasting the recent Torino Olympics, executives said on a conference call with analysts, but noted that the Olympics would be neutral to full-year earnings. They also said the upcoming 2008 Beijing Olympics could be a major boost to business, both in broadcasting and in its infrastructure unit.
"People were hoping against hope they could get things turned around" at NBC Universal, said Mike Gandrud, analyst for Johnson Asset Management, of Racine, Wisconsin, which holds about 400,000 GE shares.
The company reported first-quarter earnings from continuing operations of $4.04 billion, or 39 cents per share, up 14 percent from the prior year. Analysts polled by Reuters Estimates had expected the 39-cent profit on that basis.
GE's revenue from continuing operations, which factors out areas such as insurance, came in at $37.8 billion, up 10 percent and above the $37.39 billion expected by analysts polled by Reuters.
Fairfield, Connecticut-based GE is considered a barometer of the US economy due to its size and scope.
The world's No 2 company by market capitalisation reported net income of $4.31 billion, or 41 cents per diluted share, up from profit of $3.97 billion, 37 cents per share, a year ago.
During the first quarter, GE sold off its stake in insurer Genworth Financial Inc, for a gain of about $2.8 billion, marking its exit from that business.
Chairman and Chief Executive Officer Jeff Immelt said GE expects to continue its pace of growth, and forecast earnings per share from continuing operations ranging from 46 cents to 48 cents per share for the second quarter, matching Wall Street estimates.
Officials said they expect five of GE's six units to report double-digit profit growth in the quarter.
It expected the strongest growth AT its industrial and health care units, where it expects profits to rice 15 to 20 percent. It expects a 10 percent drop in earnings at NBC.
Full-year earnings per share from continuing operations are expected to rise 13 percent to 17 percent.
GE shares were down 25 cents, or 0.7 percent, at $34.20 on the New York Stock Exchange. The company is trading at 17.4 times projected earnings, compared with a forward price-to-earnings ratio of 15.1 for the full Dow Jones industrial average, of which it is a member.