What You Need To Know Ahead of GE HealthCare’s Earnings Report

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Key Takeaways

  • GE HealthCare Technologies reports first-quarter earnings before the opening bell Tuesday.
  • Analysts expect GE HealthCare to report year-over-year increases in revenue and net income.
  • In its report for the prior quarter, GE HealthCare suggested it could stand to benefit from its investments in artificial intelligence.
  • The recent completion of General Electric’s three-way split could also draw attention to how GE HealthCare has fared since it was spun off from GE last year.

GE HealthCare Technologies (GEHC) reports first-quarter earnings Tuesday ahead of market open, days after fellow former General Electric units GE Aerospace (GE) and GE Vernova (GEV) reported earnings for the first time as standalone companies.

Analysts expect the medical device manufacturer’s revenue and income to rise from the first quarter of 2023, projecting the company to post $4.81 billion in revenue, along with $391.52 million in net income for diluted earnings per share (EPS) of 88 cents, according to estimates compiled by Visible Alpha.

In the year-ago quarter, GE HealthCare reported $4.71 billion in revenue and $372 million in net income or 41 cents per share. The first quarter of 2023 was only GE HealthCare’s second report as a standalone company, after it was spun off from GE in January 2023.

  Analyst Estimates for Q1 2024 Q4 2023 Q1 2023
Revenue $4.81 billion $5.21 billion $4.71 billion
Diluted EPS $0.88 $0.88 $0.41
Net Income $391.52 million $403 million $372 million

Key Metric: Research and Development Spending

The company said in its fourth-quarter earnings report that it spent about $1.21 billion on research and development over fiscal 2023, an important part of which was investments in artificial intelligence (AI). In its Q4 presentation, GE HealthCare said its investments in technology including AI “position us well to deliver clinical and productivity enhancements” going forward.

Business Spotlight: GE Completes Its Three-Way Split

While it may not have a significant impact on GE HealthCare’s earnings going forward, it’s still worth noting that the recent completion of GE’s split into three separate companies could draw more attention to GE HealthCare and how it has fared since it was spun off from GE last year.

The former energy and aerospace divisions of GE separated from each other earlier this month, becoming GE Vernova and GE Aerospace, respectively, ending the transition the company started nearly three years ago. When it was announced, then-GE Chief Executive Officer (CEO) Larry Culp, who now leads GE Aerospace, said the company felt it was “under-owned” by investors in each category it operated in.

Since people who want to invest in the healthcare industry may not want to invest in a conglomerate that also manufactures airplane engines, Culp suggested investors who may have avoided GE in the past for that reason could become more excited about investing in GE HealthCare after the split.

Since its Jan. 4, 2023 debut, when it closed at $60.49, GE HealthCare has gained about 47% with shares ending Monday’s session at $88.94. They’ve climbed 15% since the start of 2024.

UPDATE—April 29, 2024: This article has been updated to reflect more recent share price information.

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