General Electric Co. affirmed its 2008 outlook today but did not provide any specific earnings per share targets for next year and said it will drop its practice of giving quarterly earnings forecasts going forward.
The industrial conglomerate, which makes everything from light bulbs to jet engines, has been battered this year by the financial crisis and problems with its financing arm GE Capital. The decision to stop providing specific earnings guidance comes after the company struggled this year to meet its own forecasts.
GE also said it plans to continue paying a dividend next year, offering investors 31 cents per share each quarter during 2009.
Company shares rose 6.3 percent, up $1.08 in late trading Tuesday.
CEO Jeff Immelt told investors at a meeting in New York that there has been a "broad systems failure in the economy," and that the company expects the tough economic conditions to extend into next year.
"The environment is the toughest for people of my generation," he said.
For 2008, GE said it still expects earnings of between $1.78 and $1.84 per share in 2008 and 50 cents to 52 cents per share in the fourth quarter. Analysts surveyed by Thomson Reuters expect earnings of $1.90 per share this year and 47 cents per share in the fourth quarter.
The company said it will now provide full-year operating "frameworks" instead of specific guidance. Next year, earnings growth on the industrial side is expected to range from zero to 5 percent. GE Capital is forecast to make $5 billion next year, down from the $9 billion in earnings expected this year.
Analysts predict that GE will earn $1.50 per share in 2009 on sales of $183.4 billion.
Earlier this month, GE outlined plans to significantly shrink GE Capital through an unspecified number of job cuts and restructuring. The division will also reduce its exposure to debt markets as it seeks greater stability during the current volatile credit markets.
Like many lenders and banks, GE Capital struggled as credit markets seized up this year, leaving it with liquidity problems. The company has turned to federal programs to shore up its liquidity and said it may inject another $5 billion into GE Capital next year. It also plans to turn to instruments such as certificates of deposit to raise funds as it relies less on debt markets.
The result is GE Capital will represent a smaller share of the conglomerate's overall results next year. The unit is expected to comprise only about 30 percent of GE's earnings next year, down from 40 percent in past years.
Stock of GE, which also owns NBC Universal, has tumbled roughly 50 percent this year, but the company has stressed as recently as last month that it planned to maintain a dividend of 31 cents per share each quarter through the end of 2009. GE has paid a dividend for more than 100 years.