General Electric, the world's most valuable listed company, has posted a 16% rise in fourth-quarter earnings.

But, as the United States corporate reporting season swung into full gear, several other big names announced substantial profit drops.

Some analysts are now predicting an "earnings recession" - defined as two consecutive quarters of lower earnings - for the first half of 2001.

They say the effect of interest rate cuts designed to limit any slowdown in economic growth will not be felt soon enough.

"While we don't believe the economy will be in recession, profits will be," Merrill Lynch chief economist Bruce Steinberg said in a 12 January report.

"We expect year-on-year growth rates for earnings to be negative during the first half of the year, then picking up by the end of the year."

The last instance of an earnings recession was in 1990-91, Merrill Lynch said.

GE: Double-digit earnings growth in 2001

Industrial and media conglomerate GE had reported fourth-quarter earnings of 36 cents a share, in line with analyst expectations.

Annual profit stood at $12.7bn (�8.6bn), up 19% from 1999. Turnover was $129.9bn.

Chairman and chief executive Jack Welch said double-digit earnings growth should continue into 2001.

"The strength of our long-cycle businesses combined with our ongoing initiatives... and our new leadership give us enormous confidence that 2001 will be another record year."

In an interview with US television station CNBC, he said this prediction would hold good even if US economic growth slowed to about zero.

Kodak woes

Photography giant Eastman Kodak offered a bleaker picture to investors, unveiling a 43% slump in fourth-quarter earnings to $352m.

Last month, the company had warned that the slowing economy would hit profits. The earnings reported were in line with analysts' revised expectations.

"What makes the comparison with last year particularly difficult is that this slowdown follows a two-year period of higher-than-historical growth in the photographic industry," chief executive Daniel Carp said.

The company did, though, manage to maintain its market share in the US "despite a highly competitive market," he said.

Computer chip giant Intel had on Tuesday reported profits at the low end of expectations that had already been revised downwards.

Banks stumble

Concerns have also mounted about the financial health of banks, including Bank of America, which has already reported lower earnings.

JP Morgan Chase & Co on Wednesday said it had achieved lower-than-expected earnings of 37 cents a share in the fourth quarter compared with $1.09 a year earlier.

Net profit on operations slipped to $763m from $2.2bn, partly because of volatile equity market conditions and the costs of implementing the merger between JP Morgan and Chase Manhattan, the bank said.

US airlines were also among those suffering declining earnings.

US Airways and American Airlines both posted sharply lower profits but Continental Airlines announced a strong earnings rise, beating expectations.