GE Healthcare Q1 results: Sales and profits drop

GE HealthCare reported financial results for the first quarter ended March 31, 2024.

GE HealthCare President and CEO Peter Arduini said, “We made good progress against 2024 priorities in the first quarter. We delivered margin expansion, while continuing to invest in innovation to solve the evolving needs of customers and patients. This is reflected in our healthy backlog, orders growth, and positive book-to-bill. We also closed the acquisition of MIM Software earlier this month as we accelerate our precision care strategy. We expect to see business growth weighted toward the second half of 2024 consistent with our previous comments, and we remain on track to deliver our guidance for the year.”

First quarter 2024 total company financial performance

• Revenues of $4.6 billion declined 1% reported and were approximately flat on an Organic* basis year-over-year, with decreased volume partially offset by positive price.
• Total company book-to-bill was solid at 1.03 times, defined as Total orders divided by Total revenues. Total company orders increased 1% organically year-over-year.
• Net income attributable to GE HealthCare was $374 million versus $372 million for the prior year, and Adjusted EBIT* was $681 million versus $664 million.
• Net income margin was 8.0% versus 7.9% for the prior year, up 10 basis points (bps). Adjusted EBIT margin* was 14.7% versus 14.1%, up 50 bps as both measures saw benefits from productivity and price.
• Diluted EPS was $0.81 versus $0.41, up $0.40 from the prior year due to a noncontrolling interest redemption of preferred stock in the prior year. Adjusted EPS* was $0.90 versus $0.85, up $0.05 from the prior year driven by improved margins and lower interest expense.
• Cash flow from operating activities was $419 million, down $49 million year-over-year. Free cash flow* was $274 million, down $51 million year-over-year. The Company repaid $150 million of debt in January 2024, as previously disclosed.

First quarter 2024 segment financial performance (Unaudited)

Growth and innovation
Arduini continued, “In the quarter we made notable progress with our R&D strategy aimed at driving innovation and growth. We received FDA clearances that will allow us to advance our product portfolio, entered strategic research partnerships, and announced long-term collaborations to supply customers with our innovative technology. Our double-digit growth in R&D affirms our commitment to technological advancement, strengthening our new product innovation pipeline, and fueling revenue expansion opportunities.”

2024 guidance
The Company is reaffirming full year 2024 guidance as follows:

• Organic revenue growth* of approximately 4% year-over-year.
• Adjusted EBIT margin* in the range of 15.6% to 15.9%, reflecting an expansion of 50 to 80 basis points versus 2023 Adjusted EBIT margin* of 15.1%.
• Adjusted effective tax rate (ETR)* in the range of 23% to 25%.
• Adjusted EPS* in the range of $4.20 to $4.35, representing 7% to 11% growth versus Adjusted EPS* of $3.93 for 2023.
• Free cash flow* of approximately $1.8 billion.

MB Bureau