updated 4/20/2008 4:17:04 PM ET 2008-04-20T20:17:04

Fresh off a disastrous quarter that wiped the luster from his company and still stinging from his predecessor's public scolding, General Electric Co. CEO Jeff Immelt may find a tougher-than-usual audience this week when he faces shareholders at the conglomerate's annual meeting.

Immelt will address several hundred shareholders in Erie, Pa., on Wednesday, less than two weeks after GE's shocking first-quarter earnings report, in which profits fell 6 percent to $4.3 billion, from $4.57 billion a year earlier. Share value for the normally reliable company tumbled nearly 13 percent and has since barely recovered.

"It might be a little more colorful this year," said Mark Demos, an analyst at Fifth Third Asset Management in Minneapolis.

The report shocked investors and analysts alike and triggered a plunge that wiped out more than $46.5 billion in market capitalization. It was the "the day GE became just another good company," said analyst Nicholas Heymann of Sterne Agee.

"Perhaps the most fundamental change is that GE's credibility has been sharply diminished, if not severely compromised," he said.

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Criticism of Fairfield, Conn.-based GE and Immelt was particularly sharp because in mid-March Immelt promised investors that annual earnings growth would hit 10 percent and the company would meet all its financial goals. The company has now cut its earnings outlook for continuing operations for the year from $2.42 per share to between $2.20 and $2.30 per share.

An Oppenheimer & Co. analyst cut his rating and price target on GE, and a Goldman Sachs analyst downgraded GE shares to neutral.

In a television interview on GE-owned cable channel CNBC, former GE Chief Executive Jack Welch promised to "get a gun out and shoot" Immelt if he ever failed to hit earnings goals again. Welch backed off those statements a day later and said he supported Immelt, who succeeded Welch in 2001.

Immelt has said GE profits were undone late in the quarter by the crash of financial services. Neither he nor Chief Financial Officer Keith Sherin would elaborate last week.

"We've addressed all the issues we're going to address," Sherin said through a spokesman.

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.

GE's annual meetings rotate across U.S. cities to showcase GE's far-flung empire — GE manufactures locomotives in Erie — and typically draw hundreds of shareholders who come to claim their stake in a company that dates to Thomas Edison and the earliest light bulb.

The meetings allow shareholders to vote on company resolutions and elect board members to oversee the company, which does nearly everything from manufacturing wind turbines, water treatment plants and jet engines to running NBC.

Peter Sorrentino, an analyst at Huntington Asset Advisors in Cincinnati, said shareholders will likely demand from Immelt explanations that go beyond the usual concerns and complaints raised at annual meetings.

"Something like why this thing isn't firing on all cylinders," he said.

Heymann said shareholders probably shouldn't expect explanations that differ from what Immelt has already said.

"I don't think you'll hear anything different from Jeff," he said. "'We'll get it back on track for the rest of the year,'" will likely be the chief executive's response, he said.

Heymann said he does not expect more earnings shortfalls. But possible senior management departures and the company's ability to sustain its AAA rating "will be much more palpable," he said.

Sorrentino, however, said a management shake-up would not be a solution.

"You're just throwing talent on the altar," he said.

GE instead may look at ways to shed or rework businesses such as medical imaging, which Sorrentino said is losing orders to competitors.

"We don't get a premium. Maybe we'll get it from breaking out the pieces," he said. "I think there's going to be some of that."

Demos said he believes some management changes are possible, but "other than that I don't think you're going to see anything else."

Copyright 2008 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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