General Electric cut its earnings forecasts and halted its buyback plans because of turmoil in the financial services markets, knocking its shares back more than 5 per cent.
The industrial conglomerate, widely seen as a barometer for the US economy, said on Thursday that it would earn between 43 cents and 48 cents per share in the third quarter, down from a previous outlook of 50 cents to 54 cents.
For the full year, it forecast earnings of $19.5 billion to $21 billion, or $1.95 to $2.10 per share, compared with its previous expectations of $22 billion to $23 billion, or $2.20 to $2.30 per share.
"Given the recent dramatic developments in the financial markets, we have made some tough decisions to further reduce risk and strengthen our balance sheet while maintaining our dividend," Chief Executive Jeff Immelt said in a statement.
"We have suspended the stock buyback to reduce GE Capital leverage, while still being able to pursue opportunistic acquisitions," he said. "We remain fully committed to the Triple-A credit rating."
Standard & Poor's affirmed the company's credit ratings shortly after the announcement.
"The economy is clearly slowing, so it's normal to see GE, heavily involved in the economy as a whole, warning on its outlook," said Philippe Gijsels, senior equity strategist at Fortis Bank in Brussels.
"I fear that there will be more of the same in the industrial sector in a not too distant future," he said.
GE shares were down 5.1 per cent at $23.33 in trading before the market opened. After falling yesterday for the third consecutive day, the stock was down nearly 8 per cent for the week to date.