Tariffs Bite Into GE HealthCare Q3 Profit Margin

Core Insights - GE HealthCare reported third-quarter 2025 adjusted earnings of $1.07 per share, surpassing the consensus estimate of $1.05 [1] - The company experienced a decline in earnings from $1.14 a year ago, primarily due to tariff expenses [2] Financial Performance - Sales reached $5.14 billion, exceeding the consensus of $5.08 billion, with a year-over-year revenue growth of 6% reported and 4% on an organic basis [2] - Revenue growth was attributed to strong performance in the U.S. and the EMEA region [2] - Total company book-to-bill ratio was 1.06 times, with total orders increasing 6% organically year-over-year [3] - Net income margin decreased to 8.7% from 9.7% in the prior year, a drop of 100 basis points [3] - Adjusted EBIT margin fell to 14.8% from 16.3%, down 150 basis points, affected by tariffs but partially offset by volume and price benefits [3] Cash Flow and Operational Highlights - Cash flow from operating activities was $593 million, while free cash flow totaled $483 million [4] - The company reported robust orders with growth across all segments, driven by customer demand for differentiated solutions and a healthy capital equipment environment [4] Guidance - GE HealthCare raised its fiscal 2025 adjusted earnings guidance from $4.43-$4.63 to $4.51-$4.63, compared to the consensus of $4.53 [5] - The company reaffirmed an adjusted EBIT margin of 15.2%-15.4%, reflecting a decline of 110 to 90 basis points compared to the 2024 adjusted EBIT margin of 16.3% [5] - The guidance includes estimated tariff impacts of $265 million to adjusted EBIT and 45 cents to adjusted earnings per share [5] Stock Performance - GE HealthCare's shares were down 2.03% at $77.79 at the time of publication [6]