GE HealthCare Technologies Inc. (GEHC) recently collaborated with the University of California San Diego School of Medicine. The tie-up aims to investigate advanced magnetic resonance imaging (MRI) protocols and techniques for female-specific diseases and conditions of the pelvis and develop comprehensive educational materials for clinicians. The Center for Translational Imaging and Precision Medicine at the University of California San Diego School of Medicine will be the collaborating site to conduct the ...

Tom Werner/DigitalVision via Getty Images I am updating my previous analysis on GE HealthCare Technologies Inc. (NASDAQ:GEHC) in light of Q2 2024 earnings which were released on July 31st, 2024. I previously rated GE HealthCare a hold for the following reasons: GE HealthCare was lagging market growth across its businesses. The AI business had potential, but I didn't believe management was correctly counting the impact of competition in their expectations. DCF generated price target of $74 was essentially fl ...

Core Viewpoint - GE HealthCare (GEHC) reported strong second-quarter 2024 adjusted earnings per share (EPS) of $1, exceeding the Zacks Consensus Estimate by 2% and showing an 8.7% year-over-year improvement [1] Revenue Details - The company generated revenues of $4.8 billion, reflecting a 0.5% increase on a reported basis and a 1.3% organic growth compared to the prior-year quarter. However, this figure fell short of the Zacks Consensus Estimate by 1% [2] Segmental Details - **Imaging**: Revenues totaled $2.6 billion, down 1% year-over-year, with organic revenues remaining flat. Segment EBIT was $286 million, up 3% year-over-year [3] - **Ultrasound**: Revenues reached $823 million, down 2% year-over-year and down 1% organically. Segment EBIT was $178 million, down 7% year-over-year [4] - **Patient Care Solutions**: Revenues amounted to $772 million, flat compared to the year-ago quarter, with a 1% organic increase. Segment EBIT was $78 million, down 8% year-over-year [4] - **Pharmaceutical Diagnostics**: Revenues were $639 million, up 12% year-over-year and 14% organically. Segment EBIT was $200 million, up 31% year-over-year [4] Margins - The net income margin was 8.9%, an increase of 20 basis points from the prior-year period, primarily driven by productivity and pricing benefits. Cumulative cash flow from operating activities at the end of the second quarter was $300 million, down from $401 million in the year-ago period [5] Financial Position - GEHC ended the second quarter with cash, cash equivalents, and investments totaling $2.02 billion, down from $2.56 billion at the end of the prior quarter. Total assets decreased to $31.85 billion from $32.21 billion in the previous quarter [6] 2024 Guidance - The company reaffirmed its earnings guidance for 2024, expecting adjusted EPS in the range of $4.20-$4.35, indicating a growth of 7-11%. Revenues are now anticipated to improve 1-2% organically, revised from the previous guidance of 4%. The Zacks Consensus Estimate for EPS and revenues stands at $4.27 and $20.12 billion, respectively [7][8]

2Q 2024 Earnings Presentation July 31, 2024 © 2024 GE HealthCare. GE is a trademark of General Electric Company used under trademark license. Forward-looking statements and additional information This presentation contains forward-looking statements. These forward-looking statements might be identified by words, and variations of words, such as "will," "expect," "may," "would," "could," "plan," "believe," "anticipate," "intend," "estimate," "potential," "position," "forecast," "target," "guidance," "outlook ...

Financial Data and Key Metrics Changes - In Q2 2024, the company reported revenues of $4.8 billion, reflecting a 1% organic growth year-over-year, compared to 9% growth in Q2 2023 [9][10] - Adjusted EBIT margin increased to 15.3%, up 60 basis points year-over-year, driven by improvements in gross margin [9][10] - Adjusted EPS was $1, representing a 9% increase year-over-year, attributed to adjusted EBIT growth and lower interest expenses [9][10] Business Line Data and Key Metrics Changes - Pharmaceutical Diagnostics (PDx) segment saw a strong organic growth of 14%, driven by volume, pricing, and new product introductions [10][14] - Imaging segment experienced flat organic revenue growth, impacted by market headwinds in China, but EBIT margin improved by 40 basis points year-over-year [12][13] - Ultrasound segment reported a 1% decline in organic revenue, with EBIT margin decreasing by 120 basis points due to lower sales in China and inflation [13] - Patient Care Solutions had a 1% organic revenue growth, with EBIT margin decreasing by 90 basis points year-over-year [13] Market Data and Key Metrics Changes - Excluding China, global revenue growth was 4%, and orders growth was 6% [3][9] - The company anticipates continued sales decline in China for the year, leading to a reduction in full-year organic revenue growth guidance to 1% to 2% [4][16] - The U.S. market showed robust performance with over $800 million in multimodality equipment contracts secured [8][9] Company Strategy and Development Direction - The company is focusing on lean initiatives and continuous improvement to enhance customer value and eliminate waste [6][7] - Strategic investments are being made in AI tools and collaborations, including an acquisition of Intelligent Ultrasound's AI division and a partnership with Amazon Web Services [8][9] - The company is optimistic about the long-term potential of the China market despite current challenges, viewing it as an attractive opportunity [5][22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in medium-term goals, emphasizing the importance of core changes in commercial execution and product innovation [34][35] - The company expects a recovery in the China market orders later in the year, despite current headwinds [5][26] - Management highlighted a strong backlog of $19 billion and a healthy pipeline for growth in the U.S. market [22][23] Other Important Information - The company is maintaining its EPS guidance for the year despite revenue reductions, indicating strong execution on cost initiatives [5][16] - Free cash flow was negative $182 million in Q2 due to timing of payments, but is expected to improve in the second half of the year [15][16] Q&A Session Summary Question: Understanding the pace of opening new orders from the stimulus program in China - Management indicated that the rollout of the stimulus program is taking longer than expected, with growth anticipated to begin in late 2024 [25][26] Question: How to maintain margins and EPS despite revenue reduction - Management attributed the ability to maintain margins and EPS to successful cost initiatives and productivity improvements [29][30] Question: Outlook for 2025 and potential catch-up from China - Management expressed confidence in mid-term goals and indicated that growth from China in 2025 could exceed previous expectations [34] Question: Insights on orders and bookings, particularly in the U.S. market - Management noted strong orders growth in the U.S. market, with a robust pipeline and positive customer sentiment regarding capital investments [38][39] Question: Long-term opportunity for contrast media and molecular imaging markets - Management is optimistic about the growth potential for products like Vizamyl and Flurpiridaz, especially with new reimbursement rules [59][61]

GE HealthCare Technologies (GEHC) came out with quarterly earnings of $1 per share, beating the Zacks Consensus Estimate of $0.98 per share. This compares to earnings of $0.92 per share a year ago. These figures are adjusted for non-recurring items. This quarterly report represents an earnings surprise of 2.04%. A quarter ago, it was expected that this medical technology company would post earnings of $0.90 per share when it actually produced earnings of $0.90, delivering no surprise. Over the last four qua ...

Revenue Performance - Total revenues for Q2 2024 were $4,839 million, approximately flat compared to Q2 2023, with a 1% organic growth [151]. - Sales of services increased by 2% or $28 million, while sales of products decreased by 1% or $6 million [151]. - Imaging segment revenues were $2,596 million, a decrease of 1% or $24 million, impacted by lower volume in China and unfavorable foreign currency effects [152]. - Ultrasound segment revenues were $823 million, down 2% or $16 million, primarily due to lower sales volume in China [152]. - Patient Care Solutions (PCS) segment revenues were $772 million, flat compared to the prior year, with 1% organic growth [152]. - Pharmaceutical Diagnostics (PDx) segment revenues grew by 12% or $71 million, driven by volume growth and new product introductions [152]. - Revenues from the US and Canada (USCAN) increased by 5% or $104 million, with growth across all segments [152]. - Revenues from the China region decreased by 18% or $131 million, affected by delayed stimulus and ongoing anti-corruption campaigns [152]. - Total revenues for the six months ended June 30, 2024, were $9,489 million, flat compared to the prior year [154]. - Total revenues for the three months ended June 30, 2024, were $4,839 million, a slight increase of 1% compared to the same period in 2023 [176]. - Organic revenue for the six months ended June 30, 2024, was $9,565 million, remaining stable compared to $9,524 million in 2023 [176]. Income and Earnings - Operating income for the three months ended June 30, 2024, was $608 million, a 7% increase from $570 million in the same period of 2023 [156]. - Net income attributable to GE HealthCare for the three months ended June 30, 2024, was $428 million, reflecting a 2% increase from $418 million in the prior year [156]. - Adjusted EBIT for the three months ended June 30, 2024, was $742 million, a 4% increase from $711 million in the same period of 2023 [156]. - Adjusted net income for the six months ended June 30, 2024, was $872 million, an 8% increase from $807 million in the prior year [163]. - Adjusted net income for the three months ended June 30, 2024, was $459 million, reflecting a 10% increase from $419 million in 2023 [183]. - Adjusted earnings per share for the three months ended June 30, 2024, was $1.00, up from $0.92 in 2023, representing an increase of 9% [185]. - The net income margin for the three months ended June 30, 2024, improved to 8.9%, up 20 basis points from 8.7% in 2023 [180]. Expenses and Investments - R&D investments increased by $29 million, contributing to a rise in R&D as a percentage of total revenues by 60 basis points [160]. - Total operating expenses increased by $25 million, with SG&A expenses decreasing by $5 million due to cost-saving initiatives [160]. - Cash used for capital expenditures was $209 million for the six months ended June 30, 2024, primarily for manufacturing capacity expansion and new product introductions [199]. Cash Flow and Debt - Free cash flow for the six months ended June 30, 2024, was $92 million, a decrease of 51% from $189 million in 2023, driven by a 25% decline in cash from operating activities [189][198]. - Cash generated from operating activities for the six months ended June 30, 2024, was $300 million, down from $401 million in 2023, with net income of $823 million in 2024 compared to $816 million in 2023 [193][194]. - Cash used for investing activities in the six months ended June 30, 2024, was $537 million, including $259 million for the acquisition of MIM Software Inc. and $209 million for capital expenditures [195][196]. - Total debt as of June 30, 2024, was $9,240 million, a decrease from $9,442 million at the end of 2023, primarily due to a $150 million repayment of the Term Loan Facility [202]. - The company had $2,015 million in cash, cash equivalents, and restricted cash as of June 30, 2024, along with access to $3,500 million in revolving credit facilities [191][204]. - The weighted average interest rate for the company's notes and credit facilities for the six months ended June 30, 2024, was 6.08% [203]. - The company plans to continue relying on capital markets and expects to have access to credit facilities to fund operations, with current credit ratings of Baa2 from Moody's, BBB from S&P, and BBB from Fitch [206][207]. Segment Performance - Imaging Segment EBIT was $526 million, an increase of $57 million due to cost productivity and an increase in price, partially offset by cost inflation [175]. - Ultrasound Segment EBIT was $360 million, a decrease of $38 million due to cost inflation and a decrease in sales volume, particularly in China [175]. - PDx Segment EBIT was $378 million, an increase of $71 million due to growth in sales volume, an increase in price, and cost productivity, partially offset by cost inflation and investments [175]. - Imaging segment revenues were $5,062 million, a decrease of 1% or $54 million compared to the prior year, impacted by unfavorable foreign currency effects [156]. - USCAN revenues increased by 3% or $114 million to $4,336 million, supported by growth in PDx and Imaging revenues [156]. Geopolitical and Market Conditions - The company continues to monitor the impact of geopolitical factors, including the Russia-Ukraine conflict and market conditions in China [140]. - Remaining Performance Obligations (RPO) as of June 30, 2024, decreased by 1% to $14,531 million from $14,655 million as of December 31, 2023, primarily due to fulfillment and cancellations outpacing new contracts [155]. - The company experienced a significant outflow of $820 million from changes in assets and liabilities in the first half of 2024, mainly due to compensation and benefit payments and inventory build [193].

Exhibit 99 GE HealthCare reports second quarter 2024 financial results Chicago, IL – July 31, 2024 – GE HealthCare (Nasdaq: GEHC) today reported financial results for the second quarter ended June 30, 2024. GE HealthCare President and CEO Peter 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 enh ...

Analyst Estimates for Q2 2024 Q1 2024 Q2 2023 Revenue $4.9 billion $4.65 billion $4.82 billion Diluted EPS 91 cents 81 cents 91 cents Net Income $418.52 million $374 million $418 million GE HealthCare shares have lost about 9.5% of their value since the company's first-quarter earnings miss, though they've gained 4% since the start of 2024 at $80.50 as of Friday's close. Key Metric: Revenue However, the company affirmed its full-year guidance despite lackluster first-quarter results, as CEO Peter Arduini sa ...

Core Viewpoint - GE HealthCare Technologies Inc. (GEHC) is expected to report second-quarter 2024 results, with a focus on revenue growth driven by strong demand in imaging and pharmaceutical diagnostics, despite challenges in sales volume and macroeconomic conditions [15][8]. Group 1: Revenue Growth and Product Development - Imaging demand remains healthy, particularly in Molecular Imaging, Computed Tomography, and Magnetic Resonance, contributing to top-line growth [2]. - The company completed the acquisition of MIM Software in April, enhancing its product portfolio with new offerings likely to generate additional revenue [2]. - The Pharmaceutical Diagnostics business is anticipated to show strong organic revenue growth due to favorable pricing and recovery in global elective procedures [3]. Group 2: Financial Estimates - The Zacks Consensus Estimate for revenues is projected at $4.89 billion, indicating a year-over-year growth of 1.5% [4]. - The earnings per share estimate is set at 97 cents, reflecting a 5.4% improvement from the previous year [19]. Group 3: Market Performance and Challenges - GEHC's shares have experienced a 25.3% increase year to date, although the company faced lower sales volumes in the second quarter [6][8]. - The Ultrasound business is expected to benefit from the launch of the LOGIQ portfolio and AI software, which may enhance workflow for urologists [9][17]. - Despite strong commercial performance, the company may be impacted by a challenging macroeconomic environment and currency headwinds [18]. Group 4: Segment Performance - The Imaging business is projected to benefit from healthcare providers' investments in capacity, with strong demand for surgical procedures driving imaging needs [25]. - The Patient Care Solutions segment may see organic revenue decline due to unfavorable volume, although improved pricing could provide some offset [27]. - Recent product launches, including the SIGNA MAGNUS MR scanner and Voluson Signature ultrasound systems, are expected to support growth in imaging and patient care solutions [26].