Core Viewpoint - GE HealthCare Technologies Inc. is recognized as one of the top digital health stocks to consider for investment, with recent positive sentiment from Wall Street analysts [1]. Financial Performance - GE HealthCare reported Q3 results on October 29, 2025, with revenue reaching approximately $5.1 billion, driven by strong performance in Imaging, Advanced Visualization, and Pharmaceutical Diagnostics, particularly in the U.S. and EMEA regions [3]. - The company experienced a 6% organic growth in orders, despite facing margin pressures from tariffs and a softer market in China [3]. Analyst Ratings and Price Targets - Morgan Stanley raised its price target for GE HealthCare from $74 to $80 on October 30, 2025, while maintaining an Equal Weight rating, citing solid order trends and a strong backlog [2]. - The adjustments to Morgan Stanley's model were made following GE HealthCare's third-quarter results, indicating a healthy demand environment as per the firm's hospital CapEx survey [2]. Company Background - GE HealthCare is a global medical technology company specializing in imaging, diagnostics, ultrasound, and patient monitoring, having begun trading as a standalone entity in January 2023 after its spin-off from General Electric [4].

Financial Data and Key Metrics Changes - For Q3 2025, global sales were $904 million, a decrease of 5% as reported, or negative 8% on a constant currency basis [7] - Adjusted EBITDA was 18.4%, up 50 basis points versus the prior year, driven by lower sales on favorable product and geography mix [8] - Non-GAAP earnings per share was $0.37, down $0.13 versus the prior year, with approximately half of the decline reflecting impacts of sales mix and tariffs [9] Business Line Data and Key Metrics Changes - Sales in the U.S. were $291 million, down 22.2% year-over-year, driven by lower sales in Essential Dental Solutions, CAD/CAM, Imaging, and Implants [10] - European sales were $382 million, increasing 9.9% as reported, or 2.6% on a constant currency basis, driven by growth in Connected Technology Solutions and labs [10] - Wellspect Healthcare sales grew 9.3% in Europe on a constant currency basis, with significant growth in the Rest of World segment [12] Market Data and Key Metrics Changes - U.S. sales were down 22.2%, while European sales increased 9.9%, indicating a divergence in market performance [10] - The Rest of World sales were $231 million, down slightly versus the prior year, with strength in Essential Dental Solutions offset by declines in Connected Technology Solutions and implants [11] Company Strategy and Development Direction - The company is focusing on a return-to-growth action plan with four key pillars: putting customers at the center, reigniting the U.S. business, empowering people, and evolving operations [14] - A transition plan is in place following the departure of the CFO to ensure continuity and maintain financial discipline [6][20] - The company plans to increase investments in R&D to improve product development processes and enhance customer experience [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the need for bold changes and emphasized a commitment to reposition the company as a market leader [27] - The revised outlook for 2025 includes net sales in the range of $3.6 billion to $3.7 billion, with constant currency sales expected to decline by 5% to 4% year-over-year [13] - Management expressed confidence in the company's potential and the importance of executing the return-to-growth plan [26] Other Important Information - The company recorded a $263 million non-cash after-tax charge related to the impairment of goodwill and intangible assets due to tariffs and lower projected volumes [9] - The Wellspect Healthcare business will play a key role in achieving financial goals, with a decision made to retain the business for greater strategic benefit [25] Q&A Session Summary Question: Insights on the U.S. market performance - Management indicated that the U.S. market's decline is due to multiple factors, including structural approach and execution issues [31][32] Question: Cadence of growth over the next two years - Management stated that while they desire to return to growth quickly, they need more time to refine the growth plan and establish a timeline for improvements [35][36] Question: Capital allocation philosophy and dividend importance - Management emphasized the need to explore the value of dividends and prioritize business growth and debt retirement [37][38] Question: R&D investment acceleration - Management confirmed plans to pull forward R&D investments to strengthen the company's position for 2026 and beyond [40][42] Question: Characteristics sought in a new CFO - Management is looking for a CFO who can analyze data effectively and communicate meaningful metrics to drive the company's return-to-health strategy [64][65]

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]

Core Viewpoint - GE HealthCare Technologies Inc. (GEHC) is expected to report third-quarter 2025 results on October 29, with anticipated steady top-line growth driven by its Advanced Visualization Solutions and Pharmaceutical Diagnostics segments, despite facing tariff pressures [1][2]. Financial Performance - In the last reported quarter, GEHC's adjusted earnings per share (EPS) was $1.06, exceeding the Zacks Consensus Estimate by 16.48%, with an average surprise of 12.53% over the last four quarters [1]. - For the upcoming third quarter, GEHC's revenues are estimated at $5.07 billion, reflecting a 4.2% year-over-year increase, while EPS is projected to be $1.05, indicating a 7.9% decrease from the prior year [7][10]. Segment Analysis - **Imaging**: The Imaging segment showed 1% organic revenue growth in the second quarter, supported by demand in the U.S. and EMEA, but faced challenges in China. Tariffs impacted EBIT margin by 110 basis points, although strong backlog and capital demand are expected to sustain growth [4]. - **Advanced Visualization Solutions (AVS)**: AVS achieved 2% organic growth in the second quarter, driven by AI-enhanced ultrasound platforms. Upcoming product launches are anticipated to support continued momentum in the third quarter [5]. - **Patient Care Solutions (PCS)**: PCS revenues were flat in the second quarter, with margin pressures due to inflation. Third-quarter results may reflect ongoing margin weakness, with improvements expected only after a product refresh cycle completes in 2026 [6]. - **Pharmaceutical Diagnostics (PDx)**: PDx grew 5% organically in the second quarter, supported by increased imaging volumes and strong demand for specific tracers. This segment is expected to help offset weaknesses in PCS [7]. Margin and Cost Outlook - Tariffs are projected to be the primary headwind for earnings, with management guiding for a high-single-digit EBITDA decline in the third quarter. The gross margin decreased by 180 basis points in the second quarter, with half attributed to trade costs [9]. - Despite these pressures, robust backlog conversion and pricing discipline may partially cushion the impact of tariffs on margins [9]. Long-Term Growth Strategy - GEHC's long-term growth is supported by a strong innovation pipeline, including next-generation imaging solutions and AI integration in ultrasound platforms. The company aims for mid-single-digit organic growth over the next several years while expanding margins [18][20]. - The company has a record backlog of $21 billion and is focused on strategic collaborations and sustained R&D investment to enhance its market position [20].

Group 1 - GE HealthCare Technologies reported revenue of $5.01 billion for the quarter ended June 2025, representing a 3.5% increase year-over-year and a surprise of +0.66% over the Zacks Consensus Estimate of $4.97 billion [1] - The earnings per share (EPS) for the quarter was $1.06, compared to $1.00 in the same quarter last year, resulting in an EPS surprise of +16.48% against the consensus estimate of $0.91 [1] - Over the past month, GE HealthCare shares returned +2.3%, while the Zacks S&P 500 composite increased by +3.4%, with the stock currently holding a Zacks Rank 3 (Hold) [3] Group 2 - Revenue from Imaging was $2.2 billion, slightly below the average estimate of $2.21 billion, reflecting a year-over-year decrease of -15.1% [4] - Advanced Visualization Solutions (AVS) generated $1.29 billion, exceeding the estimated $1.27 billion, with a significant year-over-year increase of +56.6% [4] - Revenue from Pharmaceutical Diagnostics (PDx) was $729 million, surpassing the estimated $699.23 million, marking a year-over-year increase of +14.1% [4] - Patient Care Solutions (PCS) reported revenue of $778 million, slightly below the average estimate of $784.09 million, with a year-over-year change of +0.8% [4] - Other revenues were reported at $6 million, significantly lower than the estimated $10.29 million, representing a year-over-year decline of -33.3% [4]

Core Insights - GE HealthCare Technologies (GEHC) reported revenue of $4.78 billion for the quarter ended March 2025, reflecting a year-over-year increase of 2.7% and exceeding the Zacks Consensus Estimate of $4.66 billion by 2.57% [1] - The company's earnings per share (EPS) was $1.01, up from $0.90 in the same quarter last year, resulting in an EPS surprise of 10.99% compared to the consensus estimate of $0.91 [1] Revenue Breakdown - Imaging revenues were reported at $2.14 billion, surpassing the average analyst estimate of $2.03 billion, but showing a decline of 13.2% year-over-year [4] - Other revenues amounted to $13 million, slightly below the estimated $13.30 million, with a year-over-year decrease of 13.3% [4] - PDx revenues reached $632 million, slightly above the estimate of $631.52 million, marking a year-over-year increase of 5.5% [4] - PCS revenues were reported at $753 million, exceeding the average estimate of $749.38 million, with a year-over-year growth of 0.8% [4] Stock Performance - Over the past month, GE HealthCare shares have returned -14.4%, contrasting with a -0.2% change in the Zacks S&P 500 composite [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]