GE HealthCare (Nasdaq: GEHC), a prominent global pioneer in precision care, has announced its financial results for the first quarter ending on March 31, 2024.
Peter Arduini, President and CEO of GE HealthCare, expressed satisfaction with the company’s progress in the first quarter of 2024, noting advancements in meeting the year’s priorities. Despite challenges, the company achieved margin expansion while investing in innovation to meet the evolving needs of customers and patients. This commitment to innovation is reflected in the healthy backlog, orders growth, and positive book-to-bill ratio. Additionally, the recent acquisition of MIM Software aligns with the company’s precision care strategy, further accelerating its growth trajectory. GE HealthCare anticipates business growth to be weighted toward the latter half of 2024, consistent with previous comments, and remains on track to meet its annual guidance.
Financial Performance for the First Quarter of 2024:
- Revenues amounted to $4.6 billion, reflecting a 1% decline reported and remaining approximately flat on an Organic* basis year-over-year, with decreased volume partially offset by positive price adjustments.
- The total company book-to-bill ratio stood solid at 1.03 times, with total company orders increasing 1% organically year-over-year.
- Net income attributable to GE HealthCare reached $374 million, compared to $372 million for the prior year, with Adjusted EBIT* at $681 million versus $664 million.
- Net income margin increased to 8.0% from 7.9% for the prior year, up 10 basis points (bps), while Adjusted EBIT margin* rose to 14.7% from 14.1%, up 50 bps, driven by productivity and price benefits.
- Diluted EPS increased to $0.81 from $0.41, up $0.40 from the prior year due to a noncontrolling interest redemption of preferred stock in the prior year. Adjusted EPS* rose to $0.90 from $0.85, up $0.05 from the prior year driven by improved margins and lower interest expense.
- Cash flow from operating activities amounted to $419 million, down $49 million year-over-year, with free cash flow* at $274 million, down $51 million year-over-year. The company repaid $150 million of debt in January 2024, as previously disclosed.
Growth and Innovation:
GE HealthCare continued to make significant progress in its R&D strategy during the quarter, focused on driving innovation and growth. Achievements included FDA clearances facilitating advancements in the product portfolio, strategic research partnerships, and long-term collaborations aimed at supplying customers with innovative technology. Double-digit growth in R&D underscores the company’s commitment to technological advancement, enhancing the new product innovation pipeline, and capitalizing on revenue expansion opportunities.
Recent Innovation and Commercial Highlights:
- GE HealthCare received FDA clearance for Portrait VSM, expanding its ecosystem of connected patient monitoring solutions.
- Collaboration between GE HealthCare’s MIM Software and Elekta aims to enhance radiation therapy treatments and improve patient outcomes.
- Introduction of Caption AI on Vscan Air SL Wireless Handheld Ultrasound System enables more clinicians to capture diagnostic-quality cardiac images.
- GE HealthCare closed the MIM Software Acquisition, strengthening its portfolio and advancing its precision care strategy.
- Other notable achievements include FDA clearance of nCommand Lite by IONIC Health, collaboration renewal and evolution with Hartford HealthCare, and publication on artificial intelligence models leveraging clinical data for predicting patient response to immunotherapy.
2024 Guidance:
GE HealthCare reaffirmed its full-year 2024 guidance, including:
- Organic revenue growth* of approximately 4% year-over-year.
- Adjusted EBIT margin* in the range of 15.6% to 15.9%, reflecting an expansion of 50 to 80 basis points versus 2023 Adjusted EBIT margin* of 15.1%.
- Adjusted effective tax rate (ETR)* in the range of 23% to 25%.
- Adjusted EPS* in the range of $4.20 to $4.35, representing 7% to 11% growth versus Adjusted EPS* of $3.93 for 2023.
- Free cash flow* of approximately $1.8 billion.
The Company provides its outlook on a non-GAAP basis. Please refer to the Non-GAAP Financial Measures in Outlook section below for more details.
Forward-looking Statements:
This release includes forward-looking statements, subject to various risks and uncertainties beyond the Company’s control. Factors that could affect actual results include operating in competitive markets, completing strategic transactions successfully, demand for products and services, supply chain management, geopolitical and economic instability, public health crises, compliance with regulations, and the impact of technological advancements. Please refer to the “Risk Factors” section of the Company’s Annual Report on Form 10-K for more information.
For further details, GE HealthCare will host an investor conference call on April 30, 2024, at 8:30am ET. The conference call will be broadcast live via webcast, accessible through the investor section of the website at https://investor.gehealthcare.com/news-events/events. An archived version of the webcast will be available on the website post-call.
