GE HealthCare Technologies (US:GEHC)2024-07-31 10:26Revenue 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].