UPDATE 1-NBC Universal fit within GE questioned

(Adds fund manager and analyst comments)

By Kenneth Li and Nick Zieminski

NEW YORK, April 11 (Reuters) - NBC Universal's first-quarter performance fell far short of parent General Electric's (GE.N: Quote, Profile, Research) expectations, again raising questions over whether the broadcast network belongs within the industrial conglomerate.

While NBC Universal's 3 percent rise in profit bucked an overall slide in GE's financial performance, it was short of the company's target of a 5 percent to 10 percent increase.

"I continue to have concerns about NBC Universal and its fit in the overall portfolio," said Mike Gandrud, senior analyst at Optique Capital Management.

GE blamed NBC Universal's results on a weak local advertising environment, where ad spending fell 11 percent, offsetting double-digit profit growth in its cable networks. This was despite heavy spending on political ads as candidates for the U.S. presidential election raise a record-breaking near $1 billion to finance their campaigns.

"This is an indicator that it's tough out there," GE Chief Financial Officer Keith Sherin told analysts on a conference call on Friday, referring to local advertising performance.

To be sure, other units of GE, such as financial services, health care and industrial divisions, performed worse than NBC Universal in the first quarter.

While NBC's 3 percent profit growth was less than half of the fourth quarter's 10 percent rise, GE's overall profit fell 6 percent in the first quarter, sending its shares down 12.44 percent to $32.18 on the New York Stock Exchange.