…Experts familiar with corporate financial reporting say GE officials may have been reworking the numbers right up to the earnings release.
“They have lots of ways to boost earnings,” said Michael Granof, an accounting professor at the University of Texas at Austin. “You can always time write-offs so if you have a good quarter you save it for then. Obviously, they knew they’d have to consider write-downs. The magnitude is not something they determined until the last minute.”
J. Edward Ketz, associate professor of accounting at the Smeal College at Pennsylvania State University, said he guesses that GE “did some recalculating in the last minute.”
“What often takes place in the last days or weeks is that they re-examine the estimates that go into this,” he said “People in the non-accounting world are surprised at how soft the numbers are.”
Dan Ginsburg, a spokesman for KPMG, GE’s accounting firm, cited client confidentiality and would not comment on accounting done in advance of the earnings release…
‘Shocking’ GE results show size of crisis
General Electric underlined the depth of the global financial crisis on Friday, announcing its worst quarter in five years and slashing full-year forecasts.
The news, described as “shocking” by a senior GE executive, combined with data showing that US consumer confidence was at a 26-year low to send shares lower. The S&P 500 fell 2 per cent in New York to 1,332.83.
Shares in GE, which derives more than half its revenues overseas and is seen as a bellwether of the global economy, led the way, falling 12.8 per cent – its biggest loss since the 1987 stock market crash.
The results are a blow to Jeffrey Immelt, chairman and chief executive, and could increase pressure for action at the group’s underperforming financial and healthcare divisions…