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Let’s take a look at how things might have shaped up for GEHC prior to the announcement.
Factors That Might Have Driven GEHC’s Q4 Performance
GE HealthCare Technologies entered the fourth quarter of 2024 with cautious optimism, having posted 1% organic revenue growth in the third quarter, largely in line with expectations. GEHC’s fourth-quarter performance is likely to have been mixed but with an improving outlook. While China’s weakness persists, strong U.S. demand, backlog execution and product innovation should have driven steady performance. Margin expansion initiatives and operational efficiencies must have provided additional support for sustained profitability.
Growth in the U.S. and other international markets is likely to have helped offset declines, while GEHC's strategic focus on multiyear enterprise agreements, particularly in imaging and service contracts, should have strengthened its revenue growth. Strong backlog growth, particularly in services, suggests continued stability in recurring revenue streams. Cost optimization initiatives, including product platforming and supply-chain efficiencies, are likely to have contributed to margin expansion and aided gains in the fourth quarter.
However, macroeconomic challenges persist, including ongoing market weakness in China, which has significantly affected capital equipment sales. Delays in stimulus funding coordination have prolonged purchasing slowdowns, making China a key headwind.
During the third quarter of 2024, GE HealthCare introduced several new innovations, which should have brought in additional sales during the fourth quarter. The company secured FDA clearance for a new software tool designed to standardize and automate radiation dose measurement during theragnostic treatments. This advancement is expected to have enhanced clinical efficiency and patient safety, particularly in the growing field of molecular imaging for cancer diagnosis and treatment. Additionally, GE HealthCare announced new research collaborations in Europe and the United States to expand the use of theragnostics, further solidifying its leadership in precision medicine.
GE HealthCare Technologies Inc. Price and EPS Surprise
The Imaging segment is likely to have remained a core revenue driver but might have faced near-term pressure due to sluggish demand in China. During the third quarter, the segment saw a 1% organic revenue decline, though the U.S. market remained robust with continued investments in PET and CT systems. The company is banking on strong U.S. demand for imaging replacements and upgrades, as well as expansion in theragnostics, a high-growth area that integrates diagnostics and treatment. Despite headwinds in China, backlog conversion and pricing strategies should have helped stabilize segmental performance in the fourth quarter.
Advanced Visualization Solutions, previously part of the ultrasound segment, witnessed flat organic revenues in the third quarter, with U.S. growth offset by China-related declines. The segment's performance in the fourth quarter is likely to have been driven by increased adoption of AI-driven imaging solutions and cost productivity improvements. New product introductions and digital enhancements could have provided tailwinds, although unfavorable mix shifts might have remained a concern.
Patient Care Solutions posted 2% organic revenue growth in the third quarter, benefiting from backlog execution and increased fulfillment capacity. The company has made progress in reducing past-due orders, allowing for greater flexibility in the soon-to-be-reported quarter. Continued adoption of monitoring solutions and lean manufacturing improvements should have supported steady performance in this segment.
Pharmaceutical Diagnostics was a standout performer, with 7% organic revenue growth in the last reported quarter, driven by increased procedure volumes. GEHC is well positioned for further expansion in the fourth quarter, particularly with Ocado, a newly FDA-approved PET tracer for coronary artery disease. The company expects Ocado’s launch in first-quarter 2025 to have driven long-term growth. It may provide any update on the upcoming earnings call. Favorable reimbursement trends in diagnostic imaging, particularly in PET diagnostics, could have further accelerated revenues in this high-margin segment.
The Pharmaceutical Diagnostics business is expected to have delivered strong organic revenue growth, driven by favorable prices, recovery of global elective procedures and supply stabilization. However, a strong commercial performance in the fourth quarter might have been primarily dented by a challenging macroeconomic environment and currency headwinds.
Q4 Estimates
The Zacks Consensus Estimate for revenues is pegged at $5.33 billion, implying growth of 2.4% year over year.
The Zacks Consensus Estimate for earnings per share is pinned at $1.26, suggesting an improvement of 6.8% from the prior-year level.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for GEHC this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate is 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #4 (Sell) at present.
GEHC’s Long-Term Growth Potential
GE HealthCare Technologies is poised for a dynamic 2025, driven by strategic initiatives and ongoing market challenges. New product launches should play a crucial role in shaping the company’s growth trajectory, particularly in imaging and pharmaceutical diagnostics. Ocado, GEHC’s newly FDA-approved PET tracer for coronary artery disease, is expected to drive long-term expansion in the high-margin pharmaceutical diagnostics segment. Additionally, the integration of AI-powered imaging solutions should enhance efficiency, positioning GEHC at the forefront of healthcare innovation.
Margin expansion and cost optimization are expected to continue to be a priority. The company has implemented various initiatives, including product platforming and supply-chain efficiencies, to sustain profitability. As the demand for capital equipment fluctuates, especially in international markets, these efforts should help mitigate financial volatility. AI integration in capital equipment, particularly in imaging and advanced visualization, is anticipated to improve workflow efficiency and enhance the overall value proposition for healthcare providers.
The pharmaceutical diagnostics segment remains a strong growth driver, with increased procedure volumes expected to sustain revenue gains. Favorable reimbursement trends, particularly for PET diagnostics, could further accelerate adoption. Meanwhile, capital equipment sales should be supported by ongoing investments in AI and digital tools, which is expected to improve operational efficiency and expand GEHC’s market share.
Despite these positive factors, challenges in the Chinese market remain a significant concern. Economic headwinds and delayed stimulus funding continue to impact purchasing behavior, which may weigh on overall revenue growth in 2025. However, GEHC’s diversified global presence and strong U.S. performance provide a buffer against these uncertainties. With prudent cost management, continued innovation and a balanced approach to international markets, GEHC is well-positioned for sustainable growth in 2025 and beyond.
Our Take on GEHC
GEHC’s shares have gained 6.4% in the past six months compared with the industry’s growth of 14.2%. The underperformance can be attributed to challenges in China putting pressure on top-line growth.
Image Source: Zacks Investment Research
The company’s challenges may lead to mixed performance going forward. Per the Zacks Style Score, a Zacks proprietary method to evaluate stocks, the company looks moderately valued (Value Score: C) with a strong chance of continued uptrend (Growth Score: B). The pace, however, is likely to be sluggish (Momentum Score: F).
As the Zacks Rank, coupled with the style score for GEHC, does not conclusively predict that the company may beat on earnings this reporting cycle, we caution against any new investment bet in GEHC at present. Those who have already invested in the stock may sell a portion of their investments and book profits.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.
NTRA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 36.37%. The Zacks Consensus Estimate for fourth-quarter EPS implies a rise of 34.4% from the year-ago reported figure.
Masimo (MASI - Free Report) has an Earnings ESP of +4.05% and a Zacks Rank #2 at present.
The company is scheduled to release fourth-quarter 2024 results on Feb. 25. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.10%. The Zacks Consensus Estimate for EPS implies an improvement of 14.4% from the year-ago reported figure.
Maravai LifeSciences (MRVI - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #2 at present. The company is expected to release fourth-quarter 2024 results in February.
MRVI delivered a trailing four-quarter average earnings surprise of 116.67%. The Zacks Consensus Estimate for fourth-quarter EPS implies a decline of 400% from the year-ago reported figure.
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GEHC Q4 Earnings: Will Robust Procedures Help Offset Chinese Weakness?
GE HealthCare Technologies Inc. (GEHC - Free Report) is scheduled to report fourth-quarter 2024 results on Feb. 13, before market open.
In the last reported quarter, the company’s adjusted earnings per share of $1.14 beat the Zacks Consensus Estimate by 7.55%.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
Let’s take a look at how things might have shaped up for GEHC prior to the announcement.
Factors That Might Have Driven GEHC’s Q4 Performance
GE HealthCare Technologies entered the fourth quarter of 2024 with cautious optimism, having posted 1% organic revenue growth in the third quarter, largely in line with expectations. GEHC’s fourth-quarter performance is likely to have been mixed but with an improving outlook. While China’s weakness persists, strong U.S. demand, backlog execution and product innovation should have driven steady performance. Margin expansion initiatives and operational efficiencies must have provided additional support for sustained profitability.
Growth in the U.S. and other international markets is likely to have helped offset declines, while GEHC's strategic focus on multiyear enterprise agreements, particularly in imaging and service contracts, should have strengthened its revenue growth. Strong backlog growth, particularly in services, suggests continued stability in recurring revenue streams. Cost optimization initiatives, including product platforming and supply-chain efficiencies, are likely to have contributed to margin expansion and aided gains in the fourth quarter.
However, macroeconomic challenges persist, including ongoing market weakness in China, which has significantly affected capital equipment sales. Delays in stimulus funding coordination have prolonged purchasing slowdowns, making China a key headwind.
During the third quarter of 2024, GE HealthCare introduced several new innovations, which should have brought in additional sales during the fourth quarter. The company secured FDA clearance for a new software tool designed to standardize and automate radiation dose measurement during theragnostic treatments. This advancement is expected to have enhanced clinical efficiency and patient safety, particularly in the growing field of molecular imaging for cancer diagnosis and treatment. Additionally, GE HealthCare announced new research collaborations in Europe and the United States to expand the use of theragnostics, further solidifying its leadership in precision medicine.
GE HealthCare Technologies Inc. Price and EPS Surprise
GE HealthCare Technologies Inc. price-eps-surprise | GE HealthCare Technologies Inc. Quote
GEHC’s Segmental Overview
The Imaging segment is likely to have remained a core revenue driver but might have faced near-term pressure due to sluggish demand in China. During the third quarter, the segment saw a 1% organic revenue decline, though the U.S. market remained robust with continued investments in PET and CT systems. The company is banking on strong U.S. demand for imaging replacements and upgrades, as well as expansion in theragnostics, a high-growth area that integrates diagnostics and treatment. Despite headwinds in China, backlog conversion and pricing strategies should have helped stabilize segmental performance in the fourth quarter.
Advanced Visualization Solutions, previously part of the ultrasound segment, witnessed flat organic revenues in the third quarter, with U.S. growth offset by China-related declines. The segment's performance in the fourth quarter is likely to have been driven by increased adoption of AI-driven imaging solutions and cost productivity improvements. New product introductions and digital enhancements could have provided tailwinds, although unfavorable mix shifts might have remained a concern.
Patient Care Solutions posted 2% organic revenue growth in the third quarter, benefiting from backlog execution and increased fulfillment capacity. The company has made progress in reducing past-due orders, allowing for greater flexibility in the soon-to-be-reported quarter. Continued adoption of monitoring solutions and lean manufacturing improvements should have supported steady performance in this segment.
Pharmaceutical Diagnostics was a standout performer, with 7% organic revenue growth in the last reported quarter, driven by increased procedure volumes. GEHC is well positioned for further expansion in the fourth quarter, particularly with Ocado, a newly FDA-approved PET tracer for coronary artery disease. The company expects Ocado’s launch in first-quarter 2025 to have driven long-term growth. It may provide any update on the upcoming earnings call. Favorable reimbursement trends in diagnostic imaging, particularly in PET diagnostics, could have further accelerated revenues in this high-margin segment.
The Pharmaceutical Diagnostics business is expected to have delivered strong organic revenue growth, driven by favorable prices, recovery of global elective procedures and supply stabilization. However, a strong commercial performance in the fourth quarter might have been primarily dented by a challenging macroeconomic environment and currency headwinds.
Q4 Estimates
The Zacks Consensus Estimate for revenues is pegged at $5.33 billion, implying growth of 2.4% year over year.
The Zacks Consensus Estimate for earnings per share is pinned at $1.26, suggesting an improvement of 6.8% from the prior-year level.
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for GEHC this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate is 0.00%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: The company carries a Zacks Rank #4 (Sell) at present.
GEHC’s Long-Term Growth Potential
GE HealthCare Technologies is poised for a dynamic 2025, driven by strategic initiatives and ongoing market challenges. New product launches should play a crucial role in shaping the company’s growth trajectory, particularly in imaging and pharmaceutical diagnostics. Ocado, GEHC’s newly FDA-approved PET tracer for coronary artery disease, is expected to drive long-term expansion in the high-margin pharmaceutical diagnostics segment. Additionally, the integration of AI-powered imaging solutions should enhance efficiency, positioning GEHC at the forefront of healthcare innovation.
Margin expansion and cost optimization are expected to continue to be a priority. The company has implemented various initiatives, including product platforming and supply-chain efficiencies, to sustain profitability. As the demand for capital equipment fluctuates, especially in international markets, these efforts should help mitigate financial volatility. AI integration in capital equipment, particularly in imaging and advanced visualization, is anticipated to improve workflow efficiency and enhance the overall value proposition for healthcare providers.
The pharmaceutical diagnostics segment remains a strong growth driver, with increased procedure volumes expected to sustain revenue gains. Favorable reimbursement trends, particularly for PET diagnostics, could further accelerate adoption. Meanwhile, capital equipment sales should be supported by ongoing investments in AI and digital tools, which is expected to improve operational efficiency and expand GEHC’s market share.
Despite these positive factors, challenges in the Chinese market remain a significant concern. Economic headwinds and delayed stimulus funding continue to impact purchasing behavior, which may weigh on overall revenue growth in 2025. However, GEHC’s diversified global presence and strong U.S. performance provide a buffer against these uncertainties. With prudent cost management, continued innovation and a balanced approach to international markets, GEHC is well-positioned for sustainable growth in 2025 and beyond.
Our Take on GEHC
GEHC’s shares have gained 6.4% in the past six months compared with the industry’s growth of 14.2%. The underperformance can be attributed to challenges in China putting pressure on top-line growth.
Image Source: Zacks Investment Research
The company’s challenges may lead to mixed performance going forward. Per the Zacks Style Score, a Zacks proprietary method to evaluate stocks, the company looks moderately valued (Value Score: C) with a strong chance of continued uptrend (Growth Score: B). The pace, however, is likely to be sluggish (Momentum Score: F).
As the Zacks Rank, coupled with the style score for GEHC, does not conclusively predict that the company may beat on earnings this reporting cycle, we caution against any new investment bet in GEHC at present. Those who have already invested in the stock may sell a portion of their investments and book profits.
Stocks Worth a Look
Here are a few medical stocks worth considering, as these have the right combination of elements to come up with an earnings beat this reporting cycle.
Natera (NTRA - Free Report) has an Earnings ESP of +61.91% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
NTRA’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 36.37%. The Zacks Consensus Estimate for fourth-quarter EPS implies a rise of 34.4% from the year-ago reported figure.
Masimo (MASI - Free Report) has an Earnings ESP of +4.05% and a Zacks Rank #2 at present.
The company is scheduled to release fourth-quarter 2024 results on Feb. 25. Its earnings surpassed estimates in each of the trailing four quarters, the average surprise being 17.10%. The Zacks Consensus Estimate for EPS implies an improvement of 14.4% from the year-ago reported figure.
Maravai LifeSciences (MRVI - Free Report) has an Earnings ESP of +10.00% and a Zacks Rank #2 at present. The company is expected to release fourth-quarter 2024 results in February.
MRVI delivered a trailing four-quarter average earnings surprise of 116.67%. The Zacks Consensus Estimate for fourth-quarter EPS implies a decline of 400% from the year-ago reported figure.