GE HealthCare shares fall on earnings miss, profit outlook cut

Investing.com -- GE HealthCare Technologies Inc. (NASDAQ: GEHC) reported first-quarter results that missed analyst expectations and reduced its full-year profit outlook, sending shares down 6% premarket as investors reacted to margin pressures from inflation and supply chain issues.

The medical technology company posted adjusted EPS of $0.99, missing the analyst consensus of $1.05 by $0.06. Revenue rose 7.4% to $5.1 billion, slightly above the $5.03 billion estimate and up from $4.8 billion in the prior-year period.

Organic revenue grew 2.9%, driven by strength in Pharmaceutical Diagnostics, Advanced Visualization Solutions, and Imaging segments. Net income margin fell to 7.6% from 11.8% YoY, while adjusted EBIT margin declined 150 basis points to 13.5%, impacted by tariffs, a decline in Patient Care Solutions, and a discrete PDx supplier issue that has since been resolved.

The company cut its full-year 2026 adjusted EPS guidance to a range of $4.80 to $5.00, down from prior guidance of $4.95 to $5.15. The midpoint of $4.90 represents a reduction from the previous midpoint of $5.05. GE HealthCare also lowered its adjusted EBIT margin outlook to 15.4% to 15.7% from 15.8% to 16.1%, and reduced free cash flow guidance to approximately $1.6 billion from $1.7 billion. The company maintained its organic revenue growth outlook of 3.0% to 4.0%.

"Profitability in the first quarter was impacted by a PDx supplier issue that has since been resolved. We saw significant increases in memory chips, oil and freight costs during the first quarter that we assume will impact the rest of 2026," said CEO Peter Arduini. "Given these dynamics, we are taking a prudent approach and reducing our profit outlook but expect to offset more than half of the inflation impact with price and cost actions."

The company generated $290 million in operating cash flow and $112 million in free cash flow during the quarter.

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