GE HealthCare Technologies Inc. (GEHC) Earnings & Analysis

Latest quarter

GE HealthCare reported third-quarter revenue of $5.5 billion, above the consensus of $5.4 billion and up from $5.1 billion a year earlier. Adjusted earnings per share were $1.34, above the consensus of $1.21.

The company said organic revenue grew 6.2%, exceeding its earlier forecast of 3% to 4% organic growth. Its filing attributed growth in Advanced Imaging Solutions to organic sales and the Intelerad acquisition; Pharmaceutical Diagnostics benefited from contrast media and radiopharmaceutical volume and pricing. Patient Care Solutions grew as fulfillment improved in monitoring and maternal infant care.

The filing said gross profit benefited from higher sales volume and prices and lower tariff expenses, partly offset by inflation. Operating margin rose to 14.6% from 12.7% a year earlier. GE HealthCare reported free cash flow of $793.0 million, compared with $483.0 million a year earlier; CFO Bill Grogan attributed the increase in part to lower net tariff impacts, profitability and the timing of collections.

Adjusted EPS is the figure the consensus estimates, not the GAAP EPS above.

What management said on the call

Asked about hospital capital budgets and procedure volumes, CEO Peter Arduini said imaging remained a priority in customer surveys. He said the company had not directly seen a procedure pullback in scan or contrast-use data, and noted that equipment installations can be planned well ahead.

CFO Bill Grogan said organic orders grew 4% in the third quarter and backlog ended at $23.7 billion. He said higher volumes, pricing and cost actions helped margins, while memory-chip inflation and higher oil prices added costs. Arduini said GE HealthCare had entered multi-year agreements with technology partners to secure memory chips; in response to an analyst’s question, he said locking in prices on some components was probably not realistic.

Arduini said the Patient Care Solutions team addressed supply constraints through closer work with suppliers and more frequent operating reviews. The company is also evaluating strategic options for the business, he said, and Neil Sandy will succeed departing segment CEO Jeannette Bankes.

On investment, Arduini said the planned acquisition of SOFIE Biosciences would establish a U.S. final-mile PET radiopharmaceutical supply footprint and add a tracer to the pipeline. Asked about competition in contrast media, he said the market was already generic and industry capacity was close to demand; he expected a new entrant to take some business from the broader market.

For the fourth quarter, Grogan said Advanced Imaging Solutions and Pharmaceutical Diagnostics would drive growth. He said Patient Care Solutions would grow sequentially, but its year-over-year comparison would be affected by the release of a product hold in the prior-year quarter. Asked about tariffs, Arduini identified potential Section 232 measures as an uncertainty and said the company was preparing through pricing, productivity and changes to its supply arrangements.

Guidance

GE HealthCare raised its FY2026 organic revenue growth expectation to approximately 4%, from a prior range of 3% to 4%. CFO Bill Grogan said the company now expects adjusted EBIT margin of 15.5% to 15.7%, compared with 15.4% to 15.7% previously, and adjusted EPS of $4.95 to $5.05, compared with $4.80 to $5.00.