General Electric Co. clipped the wings of its finance unit as it reduced its earnings forecast, highlighting both the impact of the credit crisis on corporate America and how companies might respond.
The Fairfield, Conn., conglomerate also cut its borrowing plans, froze its dividend and suspended its $15 billion stock-buyback program.
"We've never seen really a time of volatility like we have seen in the last month or so," said Chief Executive Jeffrey Immelt. The company said tough conditions in the financial-services markets "are not likely to improve in the near future."
GE said it expects third-quarter earnings of 43 cents to 48 cents a share, down from its July forecast of 50 cents to 54 cents a share. It also lowered its forecast for the year to a range of $1.95 to $2.10 a share from an already reduced $2.20 to $2.30. That translates into as much as $2 billion less profit for 2008.
