GE Stock Edges Up ahead of Finance-Arm Update

Shares of General Electric gained in pre-market trading Tuesday, as investors waited for the conglomerate to release details of its plans to reorganize its finance arm GE Capital Tuesday morning.

After falling 9.7 percent on Monday, shares rebounded 2 percent before hours.

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Some analysts cut their earnings forecasts for GE ahead of the event, with one predicting the Fairfield, Conn., company could use the forum to lower its 2009 earnings guidance.

General Electric announced last month that it was shuffling GE Capital in an effort to save $2 billion next year, a reorganization that will likely lead to job cuts. The finance unit, which provides consumer and commercial loans, has suffered during the credit crisis and global economic downturn.

JP Morgan analyst C. Stephen Tusa lowered his 2008 earnings per share estimate to $1.45 from $1.80 per share. Wall Street analysts expect, on average, $1.75 per share.

"We see the potential for an approximately 45 percent decline (in profit), on top of the approximately 25 percent decline now expected this year," Tusa wrote in a client note about GE's capital-services business.

Tusa, who reiterated his "Neutral" rating on the stock, expects GE's commercial-financing operations to face challenges from numerous sectors, including specialty retail, hotels, automotive, trucking, consumer services, diversified finance, construction, building products and construction materials.

Oppenheimer & Co. analyst Christopher Glynn dropped his fourth-quarter guidance to 44 cents per share from 50 cents, below the 52 cent per share Wall Street consensus. He cited factors such as stress in the credit markets for the change.

Jeffrey Sprague of Citi Investment Research wrote in an investor note that GE may use the Tuesday Webcast to lower its expectations for next year, noting the relatively short notice the company gave for the event and the upheaval in financial markets.

During the past 52 weeks, shares of GE have traded between $38.67 and a low of $12.84 reached on Nov. 20.

GE is the parent company of CNBC.

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