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Can GE HealthCare Sustain Growth in Q2 Amid Persistent Cost Headwinds?
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Key Takeaways
GEHC is expected to post healthy Q2 revenue growth, backed by imaging, diagnostics, and services demand.
GEHC faces margin pressure from inflation, freight, tariffs, and higher input costs despite pricing actions.
GEHC expects stronger second-half performance as efficiencies, pricing, and new products gain traction.
GE HealthCare Technologies Inc. (GEHC - Free Report) is scheduled to report second-quarter 2026 results on July 29, before market open.
In the last reported quarter, the company’s adjusted earnings per share (EPS) of 99 cents missed the Zacks Consensus Estimate by 7.48%. The company beat on earnings in three of the trailing four quarters and missed once, delivering an average surprise of 2.90%.
Let’s check out the factors that might have shaped GEHC’s performance prior to the announcement.
GE HealthCare Technologies Inc. Price and EPS Surprise
Factors Likely to Have Driven GEHC’s Q2 Performance
GE HealthCare is expected to have delivered another quarter of healthy revenue growth, supported by resilient global demand for imaging equipment, continued strength in Pharmaceutical Diagnostics (PDx), and robust services performance. On its first-quarter earnings call, management had maintained its full-year organic revenue growth outlook of 3-4%, citing healthy order trends, a record $21.8 billion backlog, strong book-to-bill, and improving commercial execution despite a cautious view on China.
However, profitability is likely to have remained under pressure from elevated inflation in memory chips, freight, oil and commodity costs, with management already guiding for low-single-digit adjusted EPS decline in the second quarter before improvement in the second half.
Following the organizational restructuring, the newly created Advanced Imaging Solutions business is likely to have benefited from sustained demand for CT, X-ray, ultrasound and visualization products. Imaging demand should have been supported by Revolution Vibe cardiac CT systems, while Advanced Visualization Solutions likely continued to benefit from adoption of products, such as Vivid Pioneer and other AI-enabled platforms. Although Photonova Spectra photon-counting CT generated encouraging customer interest after regulatory approvals, revenue contribution is unlikely before 2027 due to typical installation timelines.
Pharmaceutical Diagnostics is likely to have remained the company's strongest-performing business. Continued growth in contrast media, radiopharmaceuticals and molecular imaging, along with accelerating Flyrcado adoption and increasing Vizamyl demand driven by Alzheimer's imaging, likely supported another solid quarter. However, planned investments in the radiopharmaceutical pipeline and integration of recent acquisitions may have weighed on margin expansion.
Patient Care Solutions likely remained the weakest segment, although management expects gradual improvement later in the year as large monitoring installations convert from backlog and the premium anesthesia platform approaches regulatory clearance. Lower first-half volume and ongoing tariff-related costs probably continued to weigh on segment profitability.
On the margin front, the second quarter is expected to represent the peak impact from inflationary input costs, including memory chips and freight, while pricing actions and cost mitigation initiatives are likely to have provided only limited near-term relief because much of the second-quarter revenues probably originated from existing backlog. Adjusted EBIT margin and EPS are expected to have remained pressured, with a stronger recovery anticipated during the second half as pricing actions, operating efficiencies and new product momentum begin to offset inflationary pressures.
GEHC’s Estimate Picture
For second-quarter 2026, the Zacks Consensus Estimate for revenues is pegged at $5.25 billion, implying an improvement of 5% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $1.04, indicating a decrease of 1.9% from the prior-year period’s reported number.
What Our Model Suggests for GE HealthCare
Per our proven model, 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. That is not the case here, as you will see below.
Earnings ESP: GE HealthCare has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
So far this year, GE HealthCare’s shares have lost 24.4% compared with the industry’s 22.5% decline. The S&P 500 has gained 9.2% during the said period.
Image Source: Zacks Investment Research
Stocks Worth a Look
Here are some stocks from broader medical sector worth considering, as these have the right combination of elements to post an earnings beat this reporting cycle.
CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 10.27%. The Zacks Consensus Estimate for CAH’s fourth-quarter EPS indicates an improvement of 16.4% from the year-ago reported figure.
Henry Schein (HSIC - Free Report) has an Earnings ESP of +0.41% and a Zacks Rank of 2 at present. The company is scheduled to release second-quarter 2026 results on Aug. 4.
HSIC’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 3.74%. The Zacks Consensus Estimate for HSIC’s second-quarter EPS implies an improvement of 10.9% from the year-ago reported figure.
Agilent Technologies (A - Free Report) has an Earnings ESP of +1.02% and a Zacks Rank of 3 at present.
A’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 1.61%. The Zacks Consensus Estimate for A’s third-quarter fiscal 2026 EPS reflects an improvement of 8% from the year-ago reported figure.
View the Zacks #1 Rank List
Image: Bigstock
Can GE HealthCare Sustain Growth in Q2 Amid Persistent Cost Headwinds?
Key Takeaways
GE HealthCare Technologies Inc. (GEHC - Free Report) is scheduled to report second-quarter 2026 results on July 29, before market open.
In the last reported quarter, the company’s adjusted earnings per share (EPS) of 99 cents missed the Zacks Consensus Estimate by 7.48%. The company beat on earnings in three of the trailing four quarters and missed once, delivering an average surprise of 2.90%.
Let’s check out the factors that might have shaped GEHC’s performance prior to the announcement.
GE HealthCare Technologies Inc. Price and EPS Surprise
GE HealthCare Technologies Inc. price-eps-surprise | GE HealthCare Technologies Inc. Quote
Factors Likely to Have Driven GEHC’s Q2 Performance
GE HealthCare is expected to have delivered another quarter of healthy revenue growth, supported by resilient global demand for imaging equipment, continued strength in Pharmaceutical Diagnostics (PDx), and robust services performance. On its first-quarter earnings call, management had maintained its full-year organic revenue growth outlook of 3-4%, citing healthy order trends, a record $21.8 billion backlog, strong book-to-bill, and improving commercial execution despite a cautious view on China.
However, profitability is likely to have remained under pressure from elevated inflation in memory chips, freight, oil and commodity costs, with management already guiding for low-single-digit adjusted EPS decline in the second quarter before improvement in the second half.
Following the organizational restructuring, the newly created Advanced Imaging Solutions business is likely to have benefited from sustained demand for CT, X-ray, ultrasound and visualization products. Imaging demand should have been supported by Revolution Vibe cardiac CT systems, while Advanced Visualization Solutions likely continued to benefit from adoption of products, such as Vivid Pioneer and other AI-enabled platforms. Although Photonova Spectra photon-counting CT generated encouraging customer interest after regulatory approvals, revenue contribution is unlikely before 2027 due to typical installation timelines.
Pharmaceutical Diagnostics is likely to have remained the company's strongest-performing business. Continued growth in contrast media, radiopharmaceuticals and molecular imaging, along with accelerating Flyrcado adoption and increasing Vizamyl demand driven by Alzheimer's imaging, likely supported another solid quarter. However, planned investments in the radiopharmaceutical pipeline and integration of recent acquisitions may have weighed on margin expansion.
Patient Care Solutions likely remained the weakest segment, although management expects gradual improvement later in the year as large monitoring installations convert from backlog and the premium anesthesia platform approaches regulatory clearance. Lower first-half volume and ongoing tariff-related costs probably continued to weigh on segment profitability.
On the margin front, the second quarter is expected to represent the peak impact from inflationary input costs, including memory chips and freight, while pricing actions and cost mitigation initiatives are likely to have provided only limited near-term relief because much of the second-quarter revenues probably originated from existing backlog. Adjusted EBIT margin and EPS are expected to have remained pressured, with a stronger recovery anticipated during the second half as pricing actions, operating efficiencies and new product momentum begin to offset inflationary pressures.
GEHC’s Estimate Picture
For second-quarter 2026, the Zacks Consensus Estimate for revenues is pegged at $5.25 billion, implying an improvement of 5% from the prior-year quarter’s reported figure.
The consensus estimate for EPS is pegged at $1.04, indicating a decrease of 1.9% from the prior-year period’s reported number.
What Our Model Suggests for GE HealthCare
Per our proven model, 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. That is not the case here, as you will see below.
Earnings ESP: GE HealthCare has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank stocks here.
GEHC’s Share Price Performance
So far this year, GE HealthCare’s shares have lost 24.4% compared with the industry’s 22.5% decline. The S&P 500 has gained 9.2% during the said period.
Image Source: Zacks Investment Research
Stocks Worth a Look
Here are some stocks from broader medical sector worth considering, as these have the right combination of elements to post an earnings beat this reporting cycle.
Cardinal Health (CAH - Free Report) has an Earnings ESP of +1.24% and a Zacks Rank #2 at present. The company is set to release fourth-quarter fiscal 2026 results on Aug. 11. You can see the complete list of today’s Zacks #1 Rankstocks here.
CAH’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 10.27%. The Zacks Consensus Estimate for CAH’s fourth-quarter EPS indicates an improvement of 16.4% from the year-ago reported figure.
Henry Schein (HSIC - Free Report) has an Earnings ESP of +0.41% and a Zacks Rank of 2 at present. The company is scheduled to release second-quarter 2026 results on Aug. 4.
HSIC’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 3.74%. The Zacks Consensus Estimate for HSIC’s second-quarter EPS implies an improvement of 10.9% from the year-ago reported figure.
Agilent Technologies (A - Free Report) has an Earnings ESP of +1.02% and a Zacks Rank of 3 at present.
A’s earnings surpassed estimates in three of the trailing four quarters and missed once, the average surprise being 1.61%. The Zacks Consensus Estimate for A’s third-quarter fiscal 2026 EPS reflects an improvement of 8% from the year-ago reported figure.