GE Brought Bad Coverage to Life

Can we all agree now that a savvy investor still has no solid reason to rely on financial stocks delivering anything but disappointment? We might further agree that until the business media realize it is not recovery, but another regrettable earnings report, lurking around every corner, investors are not going to be safe.

Take the ridiculously overconfident coverage leading up to GE's(GE Quote) outhouse of a report.

The business media raised false expectations for results that were -- shockingly -- ruined by their financial service business.

All the breathless coverage at fault gets this week's dreaded Business Press Maven "Back of the Hand" award.

Here's a Wall Street Journal headline to choke on. And not to be underdone, an Associated Press story began with what would soon be shown to be false: "Conglomerate General Electric is expected to report healthy profit growth on Friday. GE is considered an economic bellwether, as its orbit extends into entertainment, consumer and industrial manufacturing, finance and health care." Oh well. You know what they say: Easy come, easy go for those bellwethers.

Speaking of easy come, easy go, how 'bout that GE commentary on Thursday's Fast Money? The guys there can't actively recommend the stock since the company owns CNBC, the network that airs their show, so they spoke around the ban. And boy did they speak -- saying that GE really doesn't miss, that GE invented sandbagging (holding back on earnings expectations so you can surpass them), that you can look for clues in the recent insider buying and that GE is so diversified that it could weather everything but global apocalypse.

Hmm, I guess GE's not so diversified it can weather financial service-division apocalypse.

See, it turns out that Friday morning brought disappointing earnings, which would not have been so disappointing if expectations about anyone with a financial division were held in check.

And what did we get then? My favorite post-earnings headline came from Portfolio, which ran with "G. Eek!"

Portfolio led with an apt summary:

"General Electric is a global industrial powerhouse. It is also a financial company, and it was that half that unexpectedly dragged down G.E. in the first quarter -- an unheard-of setback for a company known for meeting or beating earnings estimates quarter after quarter after quarter.

G.E. said earnings fell 6 percent, chiefly because of the turmoil in the markets in March as Bear Stearns teetered on the brink of collapse. The rare miss stunned investors, driving European markets lower."

But remember that pre-earnings Wall Street Journal headline that used the word resilience? Funny, it wasn't in the post-earnings headline: GE Posts 5.8% Fall in Net Income As Market Woes Hurt Financial Unit.

That Associated Press lead about expectations for healthy profit growth? It was replaced with this:

"Wall Street was poised to open lower Friday after General Electric Co. reported first-quarter results that fell below projections and pinned the miss on disruptions caused by the credit crisis."

Barring any actual evidence that financials have recovered, please, savvy investor, don't let yourself get taken by such rhetoric. Unless otherwise notified, assume the apocalypse.

1 What would best describe your stance heading into the coming week of trading? Bullish Bearish Neutral 2 Which of these sectors do you think is set to move up in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities 3 Which of these sectors do you think is set to move down in the coming week? --Choose One--Aerospace and DefenseAirlinesAutomobilesBeverages and Food ProductsBiotechnologyCommercial BanksComputers and PeripheralsConsumer NondurablesEnergy Equipment & ServicesHMOs and HospitalsHomebuildingInsuranceIntegrated OilInternet, Software ServicesInvestment Bankers and BrokersMediaMultiline RetailPharmaceuticalsPrecious MetalsSemis, Semi EquipmentTelecom EquipmentTobacco and AlcoholWireless CommunicationsUtilities View the results without voting