GE reports 6% drop in Q1 profits

General Electric reported a 6% drop in Q1 profits on Friday, a result one American pundit says indicates the beginning of a recession in the US.

The firm revealed profits of $4.3bn in Q1 2008, down from $4.57bn for the same period last year.

The most significant decreases were seen in the financial divisions with GE’s commercial finance arm experiencing a 20% drop and GE Money, the consumer finance arm and parent to UK subsidiary GE Money Home Lending, seeing a 19% fall in Q1.

In a media statement Jerome Heppelmann, portfolio manager at Liberty Ridge Capital in Berwyn, Pennsylvania, says: “It’s confirmation that we’re in a recession.

“While the credit crisis might be nearer to the end than the beginning, according to some, the impact on the real economy is taking place and is unlikely to abate in 2008.”