GE HealthCare Technologies (US:GEHC)2025-10-29 13:30Financial Performance - The company reported revenues of $5.1 billion, an increase of 4% year over year, driven by strong performance in imaging, AVS, and PDX businesses [8][9] - Adjusted EBIT margin was 14.8%, down 150 basis points year over year, while adjusted EPS was $1.07 per share, down 6% year over year, impacted by approximately $0.16 of tariff effects [9][10] - Free cash flow was $483 million, with a 99% conversion rate, down $168 million year over year due to higher receivables and tariff payments [16][17] Business Segment Performance - Imaging segment organic revenue grew 4% year over year, with a decline in EBIT margin of 260 basis points due to tariff pressures [11] - Advanced Visualization Solutions (AVS) saw organic revenue increase by 6% year over year, with EBIT margin improving by 180 basis points [12] - Patient Care Solutions experienced a 7% decline in organic revenue due to a product hold, with EBIT margin declining by 680 basis points [13][15] - Pharmaceutical Diagnostics reported a strong quarter with sales growing 10% organically, although EBIT margins declined by 150 basis points due to planned investments [16] Market Performance - The company noted robust orders growth of 6% year over year across all segments, with a solid backlog of $21.2 billion [8][9] - Strong performance was particularly noted in EMEA and the U.S., with imaging equipment being a top investment priority for customers [11][12] Company Strategy and Industry Competition - The company is focused on executing its precision care strategy and has increased R&D investments to drive future growth [4][20] - A planned acquisition of icometrix aims to enhance capabilities in Alzheimer's care, integrating digital tools into MR systems [6][20] - The company is committed to innovation, with over $3 billion invested in R&D since 2022, and plans to introduce numerous AI-powered products at RSNA [20][24] Management Commentary on Operating Environment and Future Outlook - Management expressed optimism about the recovery in the Chinese market and the potential for mid-single-digit growth in the medium term [30][33] - The company raised its adjusted EPS guidance for the full year, expecting to deliver between $4.51 and $4.63 per share [18][24] - Despite challenges from tariffs, management remains confident in achieving long-term growth targets and margin expansion [25][93] Other Important Information - The company has mitigated approximately 50% of its 2025 gross tariff exposure and is on track to reduce net tariff impact in 2026 [7][10] - The company is focused on disciplined capital allocation, with a priority on organic growth and evaluating M&A opportunities [17] Q&A Session Summary Question: Insights on growth in China - Management noted improvements in tender activity and ongoing recovery in the Chinese market, with optimism about long-term potential despite recent challenges [30][31] Question: Revenue growth acceleration and targets - Management confirmed confidence in achieving mid-single-digit organic growth, with expectations that stable conditions in China will support this goal [32][33] Question: Performance in Q3 and revenue guidance - Management reiterated full-year revenue guidance, citing strong performance in Q3 driven by AVS and a healthy capital environment [40][41] Question: Update on Furcato and its ramp-up - Management acknowledged a slower ramp-up for Furcato in 2025, prioritizing customer experience and workflow integration, with expectations for significant growth in 2026 [46][48] Question: Photon counting technology and patient care solutions - Management confirmed that photon counting technology is on track for upcoming announcements, while patient care solutions are expected to recover following a product hold [51][55]