GE HealthCare Slashes Annual Profit Outlook on Inflation, Q1 Earnings Miss
GEHC is trading near its 52-week low of $66.95 (8.1% below the low).
Summary
GE HealthCare has significantly cut its full-year adjusted profit forecast to a range of $4.80 to $5.00 per share, down from its prior expectation of $4.95 to $5.15. This reduction is primarily attributed to persistent inflation-driven cost pressures, particularly from memory chips, oil, and freight. The company also reported a first-quarter adjusted earnings per share of $0.99, missing analyst estimates of $1.05, partly due to a resolved supplier issue in its diagnostic business. Despite these challenges, Q1 revenue rose 7.4% to $5.13 billion, exceeding expectations, indicating healthy demand for its diagnostic and imaging devices. This revised outlook signals deteriorating profitability due to macroeconomic headwinds, directly impacting future earnings expectations and valuation, and prompted a more than 9% drop in premarket trading. Investors will closely monitor the company's ability to implement price and cost actions to offset inflation and the performance of its patient care solutions business, which saw a revenue decline.
At the time of this announcement, GEHC was trading at $61.54 on NASDAQ in the Life Sciences sector, with a market capitalization of approximately $31.3B. The 52-week trading range was $66.95 to $89.77. This news item was assessed with negative market sentiment and an importance score of 9 out of 10. Source: Reuters.