General Electric Co. (NYSE: GE) gave us a trader and volume spike alert earlier this morning. The weakness today is being tied to a Barclays research note predicting that GE 4Q earnings will likely be at the low end of its EPS $0.36 to $0.42 EPS guidance. What is more important is the additional breakdown of what is expects from the earnings rather than just the numbers.
Barclays further noted that a majority of earnings will come fromroughly a $2 billion, which may disappoint Wall Street. The firm alsothinks that if the reaction to this is as it expects, then it thinksthat Moody’s cut its outlook on GE from negative from stable. Thiswould bring the ratings agency in line with S&P’s prior call.
As a reminder, GE has already said it was going to begin ratcheting downthe use of guidance. S&P already fired a "suggestive shot" at GEover debt ratings back in December, so the Barclays note on what may come from Moody’s wouldmerely be a catch-up note.
Shares have already bounced 1% from the lows this morning.Unfortunately, they are still down 5.5% at $14.95 on 59 millionshares.
Jon C. Ogg
January 13, 2009