GE HealthCare Tech's Q1 shortfall sparks largest one-day loss since its spinoff

By Steve Gelsi

GE Healthcare's stock drops about 10% on weaker-than-expected profit and revenue - its worst daily performance since it became an independent company in early 2023

GE HealthCare Technologies Inc.'s stock was on track for its largest one-day loss since it spun out of General Electric Co., after the the company fell short of analyst estimates for revenue and adjusted income.

GE Healthcare (GEHC) said Tuesday its first-quarter profit rose to $374 million, or 81 cents a share, from $189 million, or 41 cents a share, in the year-ago quarter.

Adjusted first-quarter profit of 90 cents a share missed the FactSet consensus estimate of 91 cents a share.

Revenue fell 1% to $4.65 billion, below the analyst estimate of $4.8 billion.

GE Healthcare's stock dropped by $8.60 to $80.34 in morning trades. If the losses hold, GE stock's drop of 9.5% will rank as its largest one-day fall yet since it spun out of the former General Electric Co. in January, 2023, according to FactSet data.

Three of GE Healthcare's four main business lines reported lower revenue during the quarter.

Its imaging revenue dropped 1% to $2.47 billion, its ultrasound revenue dipped 4% to $824 million and its patient care solutions revenue fell 4% to $747 million.

On the plus side, its pharmaceutical diagnostics business booked a revenue increase of 7% to $599 million.

GE Healthcare's stock dropped by $8.60 to $80.34 in morning trades.

Looking ahead, the company expects adjusted 2024 earnings of $4.20 to $4.35 a share, against the analyst estimate of $4.30 a share.

Chief Executive Peter Arduini said the company continue to expect business growth weighted toward the second half of 2024.

"We made good progress against 2024 priorities in the first quarter," Arduini said, in a statement. "We delivered margin expansion, while continuing to invest in innovation to solve the evolving needs of customers and patients."

The company has a "healthy backlog, orders growth, and positive book-to-bill," he said.

GE Healthcare Technologies also closed its purchase of MIM Software in April.

Prior to Tuesday's trades, GE Healthcare Technologies stock was up 15% so far in 2024, compared to a 7.3% rise by the S&P 500 SPX.

-Steve Gelsi

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04-30-24 1016ET

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