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Five takeaways from GE HealthCare's first quarter 2024 results

by Gus Iversen, Editor in Chief | May 06, 2024
Business Affairs
The GE HealthCare booth at RSNA 2023
GE HealthCare stock fell over 10% when the company unveiled its first-quarter earnings last week, but has partially recovered since then.

Here are five key takeaways from the company's financial disclosure:

Stable revenue amid challenges: GE HealthCare reported revenue down 1% year-over-year, totaling $4.6 billion for the first quarter of 2024. Organic revenue growth remained flat, indicating a balance between declining volumes and positive pricing adjustments.

Weakness in China: The medical device maker's revenue from the China market, which constitutes nearly 13% of its total revenue, dropped more than 11% in the quarter. "Many of GE HealthCare's suppliers were noting weakness in China last quarter, so it makes some sense that we would see that come through (to this quarter)," BTIG analyst Ryan Zimmerman said, according to Reuters.

Cash flow and debt management: Operating cash flow was $419 million, with a decrease from the previous year's $468 million. Free cash flow also saw a reduction to $274 million. Notably, the company successfully repaid $150 million of debt in January 2024.

The story by market segment: Imaging held flat organically, at about $2.5 billion, after seeing 12% growth last year. Meanwhile, ultrasound ($824 million) and patient care solutions ($747 million) each dipped 4% and the pharmaceutical diagnostics division ($599 million) posted gains of 8%.

2024 outlook reaffirmed: GE HealthCare reaffirmed its full-year 2024 guidance, anticipating organic revenue growth of approximately 4%, with an adjusted EBIT margin between 15.6% and 15.9%. Adjusted EPS is projected to be between $4.20 and $4.35, representing growth of 7% to 11% from 2023. The projected free cash flow stands around $1.8 billion, indicating positive financial health and operational efficiency moving forward.

“We made good progress against 2024 priorities in the first quarter," GE HealthCare president and CEO Peter Arduini said in a statement. "We delivered margin expansion, while continuing to invest in innovation to solve the evolving needs of customers and patients. This is reflected in our healthy backlog, orders growth, and positive book-to-bill. We also closed the acquisition of MIM Software earlier this month as we accelerate our precision care strategy. We expect to see business growth weighted toward the second half of 2024 consistent with our previous comments, and we remain on track to deliver our guidance for the year.”

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