General Electric (NYSE:GE) gave the markets more bad news to digest this morning. The company lowered its profits forecast and suspended its share buyback program. This sent its stock futures plummeting 4.1% this morning.

GE boss Jeffrey Immelt said, “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.”

Andrew Snyder says the news is certainly bad but not devastating. He says GE’s strong foundations will see it through this difficult period. And GE’s sharp drop could prove to be a good buying opportunity:This from Today’s Financial News:

Once again, Wall Street is waking up to bad news. One of the nation’s industrial and financial titans released a negatively revised earnings forecast. It is not great news, but there is a bright side. At least General Electric (NYSE:GE) is still in business.

At about 6:45am this morning, the mega-conglomerate announced its third-quarter earnings results would fall below earlier estimates, dragging down annual results in the process. The company also revealed it will be cancelling its current share buyback program.

GE officials had previously announced Q3 earnings of $0.50 to $0.54 per share. Now those figures are just $0.43 to $0.48 per share. For the year, investors should expect earnings of $1.95 to $2.10, down from earlier consensus estimates of $2.21.

The company noted the incredible volatility in the world’s financial industry as the prime factor in the earnings revision. It also told investors it plans to reduce its exposure to the whipsaw markets by downsizing its current financial operations to just 40% of the company’s overall operations and will enter a pronounced period of deleveraging.

Bad, but not too bad

Shareholders will certainly see a hit to share price this morning, but the news is not devastating. After all, GE will keep its promise of a $1.24 annual dividend. And the company announced it will do everything it can to keep its current AAA credit rating. With no long-term borrowing needed for the rest of 2008 and plans of further deleveraging, that should not be a terribly difficult proposition.

Really, General Electric is not much different than you and I. It has been a smart investor over the last few years and has not used its high credit rating to create an insurmountable pile of debt. Now, as the nation pays for the bad choices of a few, its earnings will temporarily drop but its foundation will remain strong.

Over the next few days, weeks, and months, we are going to see a lot of similar adjustments to earnings forecasts. As the nation braces for an economic slowdown, executives across the globe have to erase their old figures and enter new ones.

It will be a bumpy ride, but as long as share prices are moving you have a great shot at bagging some healthy profits.

Source: Earnings updates: General Electric (GE) lowers forecast