General Electric said yesterday it was counting on cost reductions, lower raw material costs, and increasing income from services and acquisitions to help it meet earnings targets for 2003.

After announcing an expected 9 per cent fall in earnings per share for the first quarter, before accounting changes, Mr Jeffrey Immelt, chief executive of the US industrial and financial group, said GE was still "well positioned to deliver on the year".

In the first quarter, the group's aerospace, plastics and television interests were hit by customer uncertainty, geopolitical tension and rising oil prices.

Mr Immelt said he expected to make disposals in 2003.

He also dismissed concerns that the European Commission's probe into the planned $2.1 billion (€1.95 billion) acquisition of Finland's Instrumentarium might dampen GE's desire to do deals in Europe.

He added that GE would not shy away from making opportunistic deals in the financial sector, despite the long-term goal of keeping the group's financial services earnings between 40 and 45 per cent of the total.

Financial services contributed 51 per cent of first-quarter earnings.

GE repeated its full-year earnings goal of $1.55-$1.70 a share, but said it expected earnings for the current quarter to drop between 10 per cent and 15 per cent. - (Financial Times Service)