GE HealthCare (GEHC) beats earnings but cuts full-year revenue outlook amid China headwinds
GE HealthCare (NASDAQ: GEHC) delivered better-than-expected second-quarter earnings, but the company has tempered its full-year outlook due to headwinds in the Chinese market, sending its shares more than 8% lower in premarket trading.
While the medical technology giant reported adjusted earnings per share (EPS) of $1.00, surpassing analyst estimates by $0.02, revenue came in at $4.84 billion, slightly below expectations of $4.87 billion.
The company attributed the revenue shortfall to challenges in China, a crucial market for medical equipment. As a result, GEHC has lowered its full-year organic revenue growth forecast from approximately 4% to a range of 1% to 2%.
Despite the China-related setback, the company reported positive developments in other areas, including strong order growth in the United States and margin expansion.
GEHC's CEO, Peter Arduini, expressed satisfaction with the company's progress in advancing its margin goals while continuing to invest in future growth.
Arduini said: “In the second quarter, we delivered year-over-year sales growth and margin expansion despite headwinds in the China market.
"We also reported solid orders growth with particular strength in the U.S., as healthcare systems invest in technologies that enhance patient care and improve productivity. We are pleased with our continued progress in advancing our margin goals, while continuing our investments for future growth.”
The company also highlighted the potential benefits of recent US healthcare policy changes, which could positively impact the demand for its radiopharmaceuticals and imaging equipment.
“The recent Centers for Medicare & Medicaid Services reimbursement proposal has the potential to benefit patients in the U.S. facing cancer, cardiovascular, and neurological diseases," added Arduini. "We believe this will unlock the value of our radiopharmaceuticals and PET and SPECT scanners, ultimately enabling more precise diagnostic and treatment planning for patients.
"We’re optimistic about our pipeline of innovation and ability to bring differentiated solutions to market.”
By Sam Boughedda