General Electric, the US conglomerate, says it can extract more than $3 billion (#3.3 billion) in savings from its takeover of the industrial group Honeywell, $500 million more than it forecast three months ago.

A day after the company's shares fell nearly 10 per cent to a 17-month low, Mr Jeffrey Immelt, GE chairman-elect, told analysts that Honeywell's first quarter earnings outlook was consistent with GE's expectations.

According to analysts, Mr Immelt said GE would not seek approval from the European Commission, which is conducting an antitrust inquiry into the Honeywell deal, "at any cost".

He ruled out disposals that would change the strategic outlook of the combined company.

GE stock has come under pressure in the latest market turbulence, partly because of concerns about its $36 billion all-stock bid for Honeywell.

Ms Jeanne Terrile, analyst with Merrill Lynch, said that although the underlying operations of GE appeared to be performing well, "several factors have converged recently to give the appearance that GE is not as much in control as usual".

In early trading yesterday, GE's shares bounced back more than 5 per cent to trade above $41, but that was still more than 30 per cent down on last summer's 52-week high.

The Commission investigation into the Honeywell deal - the biggest industrial takeover to date - could last until July. As a result, Honeywell will have to report first-quarter earnings as an independent company, and Wall Street believes it may have to issue an earnings warning.

Mr Immelt told analysts that GE was still "prepared to deliver double-digit earnings growth in 2001".

GE said in December that it expected annual savings of $2.5 billion from the Honeywell deal.