GE HealthCare Reports Strong Quarterly Profit

(Reuters) – GE HealthCare (NASDAQ:GEHC) Technologies exceeded quarterly profit expectations on Wednesday, driven by robust U.S. demand for its medical devices, which compensated for declining sales in China attributable to disruptions in the country's healthcare sector due to an anti-corruption initiative.

The company updated its annual adjusted profit forecast, raising the lower end to $4.25 per share from $4.20, while maintaining the upper end at $4.35.

Analysts had anticipated an average of $4.25 per share, based on data compiled by LSEG.

"Both sales and orders grew in the mid-single digits excluding China, with particular strength in the U.S. across all segments," stated CEO Peter Arduini.

Sales in the U.S. and Canada increased 8% to $2.25 billion, whereas sales in China fell 22% to $564 million.

Medical device manufacturers have been experiencing heightened demand for cardiac procedures and non-urgent surgeries like hip and knee replacements, notably among older adults who postponed these procedures during the pandemic.

However, the company anticipates revenue growth to align with the lower end of its forecast of 1% to 2% year-over-year growth, solely due to persisting weakness in the Chinese market, which comprised 14.2% of its revenue last year.

GE HealthCare's sales faced challenges in recent quarters owing to a freeze in China's healthcare sector amid the anti-corruption campaign targeting bribery in drug and medical equipment sales, as well as delays in the country’s 2024 stimulus packages.

Total third-quarter sales for GE HealthCare reached $4.86 billion, slightly below expectations of $4.87 billion.

When excluding one-off items, GE HealthCare reported earnings of $1.14 per share, surpassing estimates of $1.05 per share.