GE Healthcare beats fourth-quarter earnings estimates to offset soft profit guidance

GE HealthCare Technologies Inc.’s stock rose 1.9% early Tuesday, after the company posted better-than-expected profit and revenue for the fourth quarter, offsetting soft profit guidance for 2024.

GE HealthCare
which was spun out of General Electric Co.
in January of 2023 and houses its medical device business, posted net income of $403 million, or 88 cents a share, for the quarter, down from $554 million, or $1.21 a share, in the year-earlier period.

Adjusted per-share earnings came to $1.18, ahead of the $1.07 FactSet consensus.

Revenue rose 5% to $5.2 billion, also ahead of the $5.1 billion FactSet consensus.

Chief Executive Peter Arduini said the company invested more than $1 billion in R&D in its first year of operation as a stand-alone company and made strategic acquisitions to bolster growth, while also paying down $1 billion in debt.

“We’re confident heading into 2024 amid the backdrop of an improved capital equipment landscape,” Arduini said in a statement.

By segment, imaging revenue rose 4% to $2.8 billion, while ultrasound revenue fell 1% to $944 million.

Patient care solutions revenue rose 5% to $827 million, and pharmaceutical diagnostics revenue rose 25% to $591 million.

The company is now expecting 2024 adjusted EPS of $4.20 to $4.35, while FactSet is expecting $5.74.

It expects organic revenue growth, which excludes the impact of foreign exchange and acquisitions. of about 4%. Free cash flow is expected to total $1.8 billion, while FactSet is expecting $2.2 billion.

In other news, GE HealthCare is participating in a project to pioneer an AI-screening platform for early detection of Alzheimer’s disease. It also announced new data validating AI models for predicting patient response to immunotherapies.

The stock has gained 2% in the last 12 months, while the S&P 500
has gained 20%.

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