GE HealthCare Beats Earnings But Margin Pressure, Tariff Costs Could Weigh On Profitability

Core Viewpoint - GE HealthCare reported strong financial results for the quarter, exceeding earnings and revenue expectations, driven by growth in key segments [1][2][3]. Financial Performance - Adjusted earnings were $1.44 per share, surpassing the consensus estimate of $1.40 [1]. - Total sales reached $5.69 billion, exceeding the consensus of $5.61 billion, with a revenue growth of 7.1% and organic revenue growth of 4.8% [2]. - Net income margin decreased to 10.3%, down 320 basis points, while adjusted EBIT margin was 16.7%, down 200 basis points, affected by tariff expenses and unfavorable mix [4]. Segment Performance - Imaging segment sales increased by 6.6% to $2.55 billion, with organic growth of 5.3% [5]. - Advanced Visualization Solutions (AVS) sales rose by 5.9% to $1.53 billion, with organic growth of 4.2% [5]. - Pharmaceutical Diagnostics sales surged by 22.3% to $790 million, with organic growth of 12.7% [5]. - Patient Care Solutions sales slightly declined by 0.3% to $825 million, with a 1.1% organic decrease [5]. Strategic Outlook - GE HealthCare anticipates a lower tariff impact in 2026 compared to 2025 and aims to deliver profitable growth and strong cash flow [6]. - The company forecasts adjusted earnings for fiscal 2026 to be between $4.95 and $5.15 per share, compared to the consensus of $4.92 [6]. Stock Performance - GE HealthCare stock increased by 6.64% to $84.01 at the time of publication [7].