- Revenue growth was 1% year-over-year; Organic revenue growth*
was 1%
- Net income margin was 9.7% versus 7.8% for the prior year;
Adjusted earnings before interest and taxes (EBIT) margin* was
16.3% versus 15.4%
- Diluted earnings per share (EPS) were $1.02 versus $0.83 for
the prior year; Adjusted EPS* was $1.14 versus $0.99
- Cash flow from operating activities was $742 million versus
$650 million for the prior year; Free cash flow* was $651 million
versus $570 million
- Company raises low end of full-year 2024 Adjusted EBIT margin*
and Adjusted EPS* guidance with continued execution; trending
toward the lower end of Organic revenue growth* range
GE HealthCare (Nasdaq: GEHC) today reported financial results
for the third quarter ended September 30, 2024.
GE HealthCare President and CEO Peter Arduini said, “In the
third quarter, we reported sales and orders growth of 1% globally.
Both sales and orders grew in the mid-single digits excluding
China, with particular strength in the U.S. across all segments.
Pharmaceutical Diagnostics also delivered solid performance, driven
by healthy procedure volumes. Ongoing lean initiatives across the
organization are delivering better value to patients and customers
and have resulted in robust margin expansion.”
Third quarter 2024 total company financial
performance
- Revenues of $4.9 billion increased 1% on both a reported and
Organic* basis year-over-year. Positive revenue growth in the U.S.
and in Pharmaceutical Diagnostics (PDx) was offset by continued
market softness in China.
- Total company book-to-bill was 1.04 times. Total company orders
increased 1% organically year-over-year.
- Net income attributable to GE HealthCare was $470 million
versus $375 million for the prior year, and Adjusted EBIT* was $795
million versus $744 million.
- Net income margin was 9.7% versus 7.8% for the prior year, up
190 basis points (bps). Adjusted EBIT margin* was 16.3% versus
15.4%, up 90 bps as both measures saw benefits from productivity
and price.
- Diluted EPS was $1.02 versus $0.83, up $0.20 from the prior
year. Adjusted EPS* was $1.14 versus $0.99, up $0.15 from the prior
year as both measures saw improved EBIT and lower tax expense.
- Cash flow from operating activities was $742 million, up $92
million year-over-year. Free cash flow* was $651 million, up $81
million year-over-year.
Third quarter 2024 segment financial performance
(Unaudited)
Effective July 1, 2024, Image Guided Therapies, previously part
of the Imaging segment, was realigned to the Ultrasound segment to
better match its clinical usage and realize stronger business and
customer impact by providing the right image guidance in the right
care setting. The Ultrasound segment was subsequently renamed
Advanced Visualization Solutions (AVS). Historical segment
financial information presented herein has been recast to conform
to the new reportable segments structure. The Company is providing
recast financial information for fiscal years 2022, 2023, and the
six months ended 2024 via a Form 8-K filed today with the U.S.
Securities and Exchange Commission.
Segment ($ in
millions)
Imaging
Advanced Visualization
Solutions
Patient Care Solutions
Pharmaceutical
Diagnostics
Segment Revenues
$2,229
$1,216
$779
$625
YoY % change
—%
—%
2%
6%
YoY % Organic* change
(1)%
—%
2%
7%
Segment EBIT
$287
$232
$82
$193
YoY % change
18%
(9)%
3%
16%
Segment EBIT Margin
12.9%
19.0%
10.6%
30.9%
YoY change
200 bps
(190) bps
10 bps
270 bps
YoY refers to year-over-year comparison on
a recast basis
Growth and innovation
Mr. Arduini continued, “The recent FDA approval of our Flyrcado™
(flurpiridaz F18) injection in the U.S. is an important moment in
molecular imaging as we continue to address unmet patient needs and
advance more precise, personalized care. Flyrcado is a
first-of-its-kind PET myocardial perfusion imaging (MPI) agent for
the detection of coronary artery disease. This milestone
achievement has the potential to expand clinical and patient access
to PET MPI.”
Recent innovation and commercial highlights
- GE HealthCare announces AI Innovation Lab showcasing five new
research projects
- GE HealthCare announces CareIntellect for Oncology, harnessing
AI to give clinicians an easy way to see the patient journey in a
single view
- GE HealthCare unveils its first CT scanner production line in
France and announces the installation of the first scanner made in
France at the Montargis Hospital Center
- A New Theranostics Center of Excellence in Europe: GE
HealthCare and University Medicine Essen collaborate to advance
Theranostics and personalized medicine
- GE HealthCare takes key role in new consortium to revolutionize
cancer care, advancing precision medicine for patients in
Europe
- GE HealthCare’s MIM Software announces FDA clearance of Monte
Carlo dosimetry for Theranostics
- GE HealthCare announces FDA approval of Flyrcado injection PET
radiotracer for enhanced diagnosis of coronary artery disease
- GE HealthCare showcases the latest AI-enhanced radiation
therapy solutions at ASTRO 2024
- GE HealthCare introduces elevated Venue point of care
ultrasound solutions and new tablet-based Venue Sprint
- GE HealthCare’s MIM Software announces FDA Clearance of new
Centiloid scaling tool to quantify amyloid plaque in brain
imaging
- Clinical study shows targeted End-tidal Control Anesthesia
Delivery improves efficiency and accuracy to help optimize patient
care
2024 Guidance
Today, the Company updates full-year 2024 guidance as
follows:
- Organic revenue growth* trending toward the lower end of the
range of 1% to 2% year-over-year, given the continued China market
softness
- Adjusted EBIT margin* in the range of 15.8% to 16.0%,
reflecting an expansion of 70 to 90 basis points versus 2023
Adjusted EBIT margin* of 15.1%; this compares to prior guidance of
15.7% to 16.0%
- Adjusted effective tax rate (ETR)* trending toward the lower
end of the 23% to 25% range, given additional tax incentives
recognized in third quarter 2024
- Adjusted EPS* in the range of $4.25 to $4.35, representing 8%
to 11% growth versus Adjusted EPS* of $3.93 for 2023; this compares
with prior range of $4.20 to $4.35
- Free cash flow* of approximately $1.8 billion
The Company provides its outlook on a non-GAAP basis. Refer to
the Non-GAAP Financial Measures in Outlook section below for more
details.
Financial rounding
Certain columns and rows in this document may not sum due to the
use of rounded numbers. Percentages presented are calculated from
the underlying whole-dollar amounts.
Condensed Consolidated Statements of
Income (Unaudited)
For the three months ended
September 30
For the nine months ended
September 30
(In millions, except per share
amounts)
2024
2023
2024
2023
Sales of products
$
3,201
$
3,186
$
9,454
$
9,530
Sales of services
1,662
1,636
4,899
4,816
Total revenues
4,863
4,822
14,353
14,346
Cost of products
2,033
2,076
6,045
6,197
Cost of services
805
811
2,378
2,383
Gross profit
2,026
1,935
5,930
5,766
Selling, general, and administrative
1,034
996
3,139
3,130
Research and development
316
322
967
890
Total operating expenses
1,350
1,318
4,106
4,020
Operating income
676
617
1,824
1,746
Interest and other financial charges –
net
130
138
383
411
Non-operating benefit (income) costs
(102
)
(94
)
(306
)
(332
)
Other (income) expense – net
(9
)
(63
)
(1
)
(85
)
Income from continuing operations
before income taxes
658
636
1,747
1,752
Benefit (provision) for income taxes
(168
)
(250
)
(435
)
(550
)
Net income from continuing
operations
490
386
1,312
1,202
Income (loss) from discontinued
operations, net of taxes
—
(4
)
—
(4
)
Net income
490
382
1,312
1,198
Net (income) loss attributable to
noncontrolling interests
(19
)
(7
)
(40
)
(33
)
Net income attributable to GE
HealthCare
470
375
1,272
1,165
Deemed preferred stock dividend of
redeemable noncontrolling interest
—
—
—
(183
)
Net income attributable to GE
HealthCare common stockholders
$
470
$
375
$
1,272
$
982
Earnings per share from continuing
operations attributable to GE HealthCare common
stockholders:
Basic
$
1.03
$
0.83
$
2.79
$
2.17
Diluted
1.02
0.83
2.77
2.16
Earnings per share attributable to GE
HealthCare common stockholders:
Basic
$
1.03
$
0.82
$
2.79
$
2.16
Diluted
1.02
0.82
2.77
2.15
Weighted-average number of shares
outstanding:
Basic
457
455
456
455
Diluted
459
458
459
458
Condensed Consolidated Statements of
Financial Position (Unaudited)
As of
(In millions, except share and per
share amounts)
September 30, 2024
December 31, 2023
Cash, cash equivalents, and restricted
cash
$
3,568
$
2,504
Receivables – net of allowances of $104
and $98
3,418
3,525
Due from related parties
6
32
Inventories
2,124
1,960
Contract and other deferred assets
1,046
1,000
All other current assets
476
389
Current assets
10,638
9,410
Property, plant, and equipment – net
2,539
2,500
Goodwill
13,138
12,936
Other intangible assets – net
1,132
1,253
Deferred income taxes
4,309
4,474
All other non-current assets
2,098
1,881
Total assets
$
33,855
$
32,454
Short-term borrowings
$
1,007
$
1,006
Accounts payable
2,911
2,947
Due to related parties
7
99
Contract liabilities
1,915
1,918
Current compensation and benefits
1,422
1,518
All other current liabilities
1,409
1,493
Current liabilities
8,670
8,981
Long-term borrowings
9,306
8,436
Non-current compensation and benefits
5,388
5,782
Deferred income taxes
59
68
All other non-current liabilities
1,920
1,877
Total liabilities
25,343
25,144
Commitments and contingencies
Redeemable noncontrolling
interests
177
165
Common stock, par value $0.01 per share,
1,000,000,000 shares authorized, 457,144,443 shares issued as of
September 30, 2024; 455,342,290 shares issued as of December 31,
2023
5
5
Treasury stock, at cost, 291,053 shares as
of September 30, 2024 and 0 shares as of December 31, 2023
(25
)
—
Additional paid-in capital
6,551
6,493
Retained earnings
2,558
1,326
Accumulated other comprehensive income
(loss) – net
(771
)
(691
)
Total equity attributable to GE
HealthCare
8,317
7,133
Noncontrolling interests
18
12
Total equity
8,335
7,145
Total liabilities, redeemable
noncontrolling interests, and equity
$
33,855
$
32,454
Condensed Consolidated Statements of
Cash Flows (Unaudited)
For the nine months ended
September 30
(In millions)
2024
2023
Net income
$
1,312
$
1,198
Less: Income (loss) from discontinued
operations, net of taxes
—
(4
)
Net income from continuing
operations
$
1,312
$
1,202
Adjustments to reconcile Net income from
continuing operations to Cash from (used for) operating
activities
Depreciation of property, plant, and
equipment
203
188
Amortization of intangible assets
237
278
Gain on fair value remeasurement of
contingent consideration
(19
)
(17
)
Net periodic postretirement benefit plan
(income) expense
(271
)
(291
)
Postretirement plan contributions
(257
)
(259
)
Share-based compensation
92
81
Provision for income taxes
435
550
Cash paid during the year for income
taxes
(375
)
(375
)
Changes in operating assets and
liabilities, excluding the effects of acquisitions:
Receivables
83
(82
)
Due from related parties
24
9
Inventories
(157
)
(85
)
Contract and other deferred assets
(33
)
(75
)
Accounts payable
3
(93
)
Due to related parties
(72
)
(87
)
Contract liabilities
(25
)
69
Current compensation and benefits
(97
)
37
All other operating activities - net
(41
)
1
Cash from (used for) operating
activities – continuing operations
1,042
1,051
Cash flows – investing
activities
Additions to property, plant and equipment
and internal-use software
(299
)
(293
)
Dispositions of property, plant, and
equipment
—
1
Purchases of businesses, net of cash
acquired
(259
)
(147
)
Purchases of investments
(33
)
(21
)
All other investing activities - net
(83
)
(10
)
Cash from (used for) investing
activities – continuing operations
(674
)
(470
)
Cash flows – financing
activities
Net increase (decrease) in borrowings
(maturities of 90 days or less)
—
(9
)
Newly issued debt, net of debt issuance
costs (maturities longer than 90 days)
994
2,020
Repayments and other reductions
(maturities longer than 90 days)
(162
)
(9
)
Dividends paid to stockholders
(41
)
(28
)
Redemption of noncontrolling interests
—
(211
)
Net transfers (to) from GE
—
(1,317
)
Proceeds from stock issued under employee
benefit plans
31
31
Taxes paid related to net share settlement
of equity awards
(90
)
(31
)
All other financing activities - net
(28
)
(24
)
Cash from (used for) financing
activities – continuing operations
704
422
Cash from (used for) operating activities
– discontinued operations
(4
)
—
Effect of foreign currency rate changes on
cash, cash equivalents, and restricted cash
(2
)
(34
)
Increase (decrease) in cash, cash
equivalents, and restricted cash
1,066
969
Cash, cash equivalents, and restricted
cash at beginning of year
2,506
1,451
Cash, cash equivalents, and restricted
cash as of September 30
$
3,572
$
2,420
Supplemental disclosure of cash flows
information
Cash paid during the year for interest
$
(339
)
$
(318
)
Non-cash investing activities
Acquired but unpaid property, plant, and
equipment
$
72
$
80
Non-GAAP Financial Measures
The non-GAAP financial measures presented in this press release
are supplemental measures of GE HealthCare’s performance and its
liquidity that the Company believes will help investors understand
its financial condition, cash flows, and operating results, and
assess its future prospects. When read in conjunction with the
Company’s U.S. GAAP results, these non-GAAP financial measures
provide a baseline for analyzing trends in GE HealthCare’s
underlying businesses and can be used by management as one basis
for making financial, operational, and planning decisions.
Descriptions of the reported non-GAAP measures are included
below.
The Company reports Organic revenue and Organic revenue growth
rate to provide management and investors with additional
understanding and visibility into the underlying revenue trends of
the Company’s established, ongoing operations, as well as provide
insights into overall demand for its products and services. To
calculate these measures, the Company excludes the effect of
acquisitions, dispositions, and foreign currency rate
fluctuations.
The Company reports EBIT, Adjusted EBIT, Adjusted EBIT margin,
Adjusted net income, Adjusted net income margin, and Adjusted
earnings per share to provide management and investors with
additional understanding of its business by highlighting the
results from ongoing operations and the underlying profitability
factors, on a normalized basis. To calculate these measures the
Company excludes, and reflects in the detailed reconciliations
below, the following adjustments as applicable: Interest and other
financial charges - net, Net (income) loss attributable to
noncontrolling interests, Non-operating benefit (income) costs,
Benefit (provision) for income taxes and certain tax related
adjustments, and certain non-recurring and/or non-cash items. GE
HealthCare may from time to time consider excluding other
non-recurring items to enhance comparability between periods.
Adjusted EBIT margin and Adjusted net income margin are calculated
by taking Adjusted EBIT, or Adjusted net income, divided by Total
revenues for the same period.
The Company reports Adjusted tax expense and Adjusted effective
tax rate (“Adjusted ETR”) to provide investors with a better
understanding of the normalized tax rate applicable to the business
and provide more consistent comparability across periods. Adjusted
tax expense excludes the income tax related to the pre-tax income
adjustments included as part of Adjusted net income and certain
income tax adjustments, such as adjustments to deferred tax assets
or liabilities. The Company may from time to time consider
excluding other non-recurring tax items to enhance comparability
between periods. Adjusted ETR is Adjusted tax expense divided by
income before income taxes less the pre-tax income adjustments
referenced above.
The Company reports Free cash flow and Free cash flow conversion
to provide management and investors with an important measure of
the ability to generate cash on a normalized basis and provide
insight into the Company’s flexibility to allocate capital. Free
cash flow is Cash from (used for) operating activities - continuing
operations including cash flows related to the additions and
dispositions of property, plant, and equipment (“PP&E”) and
additions of internal-use software. Free cash flow does not
represent residual cash flows available for discretionary
expenditures, due to the fact that the measure does not deduct the
capital required for debt repayments. Free cash flow conversion is
calculated by taking Free cash flow divided by Adjusted net
income.
Management recognizes that these non-GAAP financial measures
have limitations, including that they may be calculated differently
by other companies or may be used under different circumstances or
for different purposes. In order to compensate for the discussed
limitations, management does not consider these measures in
isolation from or as alternatives to the comparable financial
measures determined in accordance with U.S. GAAP. The detailed
reconciliations of each non-GAAP financial measure to the most
directly comparable U.S. GAAP financial measure are provided below,
and no single financial measure should be relied on to evaluate our
business.
Non-GAAP Financial Reconciliations
Organic Revenue*
Unaudited
For the three months ended
September 30
For the nine months ended
September 30
($ in millions)
2024
2023
% change
2024
2023
% change
Imaging revenues
$
2,229
$
2,236
—
%
$
6,462
$
6,552
(1
)%
Less: Acquisitions(1)
16
—
29
—
Less: Dispositions(2)
—
—
—
—
Less: Foreign currency exchange
(8
)
—
(65
)
—
Imaging Organic revenue*
$
2,220
$
2,236
(1
)%
$
6,497
$
6,552
(1
)%
AVS revenues
$
1,216
$
1,214
—
%
$
3,692
$
3,712
(1
)%
Less: Acquisitions(1)
—
—
—
—
Less: Dispositions(2)
—
—
—
—
Less: Foreign currency exchange
(2
)
—
(22
)
—
AVS Organic revenue*
$
1,218
$
1,214
—
%
$
3,713
$
3,712
—
%
PCS revenues
$
779
$
764
2
%
$
2,298
$
2,315
(1
)%
Less: Acquisitions(1)
—
—
—
—
Less: Dispositions(2)
—
—
—
—
Less: Foreign currency exchange
—
—
(4
)
—
PCS Organic revenue*
$
779
$
764
2
%
$
2,302
$
2,315
(1
)%
PDx revenues
$
625
$
589
6
%
$
1,862
$
1,715
9
%
Less: Acquisitions(1)
—
—
—
—
Less: Dispositions(2)
—
—
—
—
Less: Foreign currency exchange
(5
)
—
(13
)
—
PDx Organic revenue*
$
630
$
589
7
%
$
1,876
$
1,715
9
%
Other revenues
$
15
$
19
(22
)%
$
39
$
52
(25
)%
Less: Acquisitions(1)
—
—
—
—
Less: Dispositions(2)
—
—
—
—
Less: Foreign currency exchange
—
—
—
—
Other Organic revenue*
$
15
$
19
(21
)%
$
39
$
52
(25
)%
Total revenues
$
4,863
$
4,822
1
%
$
14,353
$
14,346
—
%
Less: Acquisitions(1)
16
—
29
—
Less: Dispositions(2)
—
—
—
—
Less: Foreign currency exchange
(15
)
—
(104
)
—
Organic revenue*
$
4,863
$
4,822
1
%
$
14,427
$
14,346
1
%
(1)
Represents revenues attributable to
acquisitions from the date the Company completed the transaction
through the end of four quarters following the transaction.
(2)
Represents revenues attributable to
dispositions for the four quarters preceding the disposition
date.
Adjusted EBIT*
Unaudited
For the three months ended
September 30
For the nine months ended
September 30
($ in millions)
2024
2023
% change
2024
2023
% change
Net income attributable to GE
HealthCare
$
470
$
375
25
%
$
1,272
$
1,165
9
%
Add: Interest and other financial charges
– net
130
138
383
411
Add: Non-operating benefit (income)
costs
(102
)
(94
)
(306
)
(332
)
Less: Benefit (provision) for income
taxes
(168
)
(250
)
(435
)
(550
)
Less: Income (loss) from discontinued
operations, net of taxes
—
(4
)
—
(4
)
Less: Net (income) loss attributable to
noncontrolling interests
(19
)
(7
)
(40
)
(33
)
EBIT*
$
685
$
680
1
%
$
1,825
$
1,831
—
%
Add: Restructuring costs(1)
22
3
90
34
Add: Acquisition and disposition-related
charges (benefits)(2)
(4
)
(14
)
(7
)
(15
)
Add: Spin-Off and separation costs(3)
56
45
182
175
Add: (Gain) loss on business and asset
dispositions(4)
1
—
—
—
Add: Amortization of acquisition-related
intangible assets
34
32
100
95
Add: Investment revaluation (gain)
loss(5)
1
(2
)
26
(1
)
Adjusted EBIT*
$
795
$
744
7
%
$
2,217
$
2,119
5
%
Net income margin
9.7
%
7.8
%
190 bps
8.9
%
8.1
%
70 bps
Adjusted EBIT margin*
16.3
%
15.4
%
90 bps
15.4
%
14.8
%
70 bps
(1)
Consists of severance, facility closures,
and other charges associated with restructuring programs.
(2)
Consists of legal, consulting, and other
transaction and integration fees, and adjustments to contingent
consideration, as well as other purchase accounting related charges
and other costs directly related to the transactions.
(3)
Costs incurred in the Spin-Off and
separation from GE, including system implementations, audit and
advisory fees, legal entity separation, Founders Grant equity
awards, separation agreements with GE, and other one-time
costs.
(4)
Consists of gains and losses resulting
from the sale of assets and investments.
(5)
Primarily relates to valuation adjustments
for equity investments.
Adjusted Net Income*
Unaudited
For the three months ended
September 30
For the nine months ended
September 30
($ in millions)
2024
2023
% change
2024
2023
% change
Net income attributable to GE
HealthCare
$
470
$
375
25
%
$
1,272
$
1,165
9
%
Add: Non-operating benefit (income)
costs
(102
)
(94
)
(306
)
(332
)
Add: Restructuring costs(1)
22
3
90
34
Add: Acquisition and disposition-related
charges (benefits)(2)
(4
)
(14
)
(7
)
(15
)
Add: Spin-Off and separation costs(3)
56
45
182
175
Add: (Gain) loss on business and asset
dispositions(4)
1
—
—
—
Add: Amortization of acquisition-related
intangible assets
34
32
100
95
Add: Investment revaluation (gain)
loss(5)
1
(2
)
26
(1
)
Add: Tax effect of reconciling
items(6)
(3
)
(4
)
(26
)
(3
)
Add: Spin-Off and other tax
adjustments(7)
46
106
60
136
Less: Income (loss) from discontinued
operations, net of taxes
—
(4
)
—
(4
)
Adjusted net income*
$
521
$
451
16
%
$
1,393
$
1,258
11
%
Adjusted net income margin*
10.7
%
9.4
%
140 bps
9.7
%
8.8
%
90 bps
(1)
Consists of severance, facility closures,
and other charges associated with restructuring programs.
(2)
Consists of legal, consulting, and other
transaction and integration fees, and adjustments to contingent
consideration, as well as other purchase accounting related charges
and other costs directly related to the transactions.
(3)
Costs incurred in the Spin-Off and
separation from GE, including system implementations, audit and
advisory fees, legal entity separation, Founders Grant equity
awards, separation agreements with GE, and other one-time
costs.
(4)
Consists of gains and losses resulting
from the sale of assets and investments.
(5)
Primarily relates to valuation adjustments
for equity investments.
(6)
The tax effect of reconciling items is
calculated using the statutory tax rate, taking into consideration
the nature of the items and the relevant taxing jurisdiction.
(7)
Consists of certain income tax
adjustments, including the accrual of a deferred tax liability on
the prior period earnings of certain of the Company’s foreign
subsidiaries for which the Company is no longer permanently
reinvested, the impact of adjusting deferred tax assets and
liabilities to stand-alone GE HealthCare tax rates, and the impact
of tax legislation changes. As of the third quarter of 2024 this
line additionally includes discrete tax impacts resulting from the
Spin-Off and separation from GE previously reported under Tax
effect of reconciling items.
Adjusted Earnings Per Share*
Unaudited
For the three months ended
September 30
For the nine months ended
September 30
(In dollars, except shares outstanding
presented in millions)
2024
2023
$ change
2024
2023
$ change
Diluted earnings per share – continuing
operations
$
1.02
$
0.83
$
0.20
$
2.77
$
2.16
$
0.61
Add: Deemed preferred stock dividend of
redeemable noncontrolling interest
—
—
—
0.40
Add: Non-operating benefit (income)
costs
(0.22
)
(0.21
)
(0.67
)
(0.73
)
Add: Restructuring costs(1)
0.05
0.01
0.20
0.07
Add: Acquisition and disposition-related
charges (benefits)(2)
(0.01
)
(0.03
)
(0.02
)
(0.03
)
Add: Spin-Off and separation costs(3)
0.12
0.10
0.40
0.38
Add: (Gain) loss on business and asset
dispositions(4)
0.00
—
—
—
Add: Amortization of acquisition-related
intangible assets
0.08
0.07
0.22
0.21
Add: Investment revaluation (gain)
loss(5)
0.00
(0.00
)
0.06
(0.00
)
Add: Tax effect of reconciling
items(6)
(0.01
)
(0.01
)
(0.06
)
(0.01
)
Add: Spin-Off and other tax
adjustments(7)
0.10
0.23
0.13
0.30
Adjusted earnings per share*
$
1.14
$
0.99
$
0.15
$
3.04
$
2.75
$
0.29
Diluted weighted-average shares
outstanding
459
458
459
458
(1)
Consists of severance, facility closures,
and other charges associated with restructuring programs.
(2)
Consists of legal, consulting, and other
transaction and integration fees, and adjustments to contingent
consideration, as well as other purchase accounting related charges
and other costs directly related to the transactions.
(3)
Costs incurred in the Spin-Off and
separation from GE, including system implementations, audit and
advisory fees, legal entity separation, Founders Grant equity
awards, separation agreements with GE, and other one-time
costs.
(4)
Consists of gains and losses resulting
from the sale of assets and investments.
(5)
Primarily relates to valuation adjustments
for equity investments.
(6)
The tax effect of reconciling items is
calculated using the statutory tax rate, taking into consideration
the nature of the items and the relevant taxing jurisdiction.
(7)
Consists of certain income tax
adjustments, including the accrual of a deferred tax liability on
the prior period earnings of certain of the Company’s foreign
subsidiaries for which the Company is no longer permanently
reinvested, the impact of adjusting deferred tax assets and
liabilities to stand-alone GE HealthCare tax rates, and the impact
of tax legislation changes. As of the third quarter of 2024 this
line additionally includes discrete tax impacts resulting from the
Spin-Off and separation from GE previously reported under Tax
effect of reconciling items.
Adjusted Tax Expense* and Adjusted
ETR*
Unaudited
For the three months ended
September 30
For the nine months ended
September 30
($ in millions)
2024
2023
2024
2023
Benefit (provision) for income
taxes
$
(168
)
$
(250
)
$
(435
)
$
(550
)
Add: Tax effect of reconciling
items(1)
(3
)
(4
)
(26
)
(3
)
Add: Spin-Off and other tax
adjustments(2)
46
106
60
136
Adjusted tax expense*
$
(124
)
$
(148
)
$
(401
)
$
(417
)
Effective tax rate
25.5
%
39.3
%
24.9
%
31.4
%
Adjusted effective tax rate*
18.7
%
24.4
%
21.9
%
24.4
%
(1)
The tax effect of reconciling items is
calculated using the statutory tax rate, taking into consideration
the nature of the items and the relevant taxing jurisdiction.
(2)
Consists of certain income tax
adjustments, including the accrual of a deferred tax liability on
the prior period earnings of certain of the Company’s foreign
subsidiaries for which the Company is no longer permanently
reinvested, the impact of adjusting deferred tax assets and
liabilities to stand-alone GE HealthCare tax rates, and the impact
of tax legislation changes. As of the third quarter of 2024 this
line additionally includes discrete tax impacts resulting from the
Spin-Off and separation from GE previously reported under Tax
effect of reconciling items.
Free Cash Flow*
Unaudited
For the three months ended
September 30
For the nine months ended
September 30
($ in millions)
2024
2023
% change
2024
2023
% change
Cash from (used for) operating
activities – continuing operations
$
742
$
650
14
%
$
1,042
$
1,051
(1
)%
Add: Additions to PP&E and
internal-use software
(90
)
(80
)
(299
)
(293
)
Add: Dispositions of PP&E
—
—
—
1
Free cash flow*
$
651
$
570
14
%
$
743
$
759
(2
)%
Non-GAAP Financial Measures in Outlook
GE HealthCare calculates forward-looking non-GAAP financial
measures, including Organic revenue growth, Adjusted EBIT margin,
Adjusted ETR, Adjusted EPS, and Free cash flow based on internal
forecasts that omit certain amounts that would be included in GAAP
financial measures. GE HealthCare does not provide reconciliations
of these forward-looking non-GAAP financial measures to the
respective GAAP metrics as it is unable to predict with reasonable
certainty and without unreasonable effort certain items such as the
impact of changes in currency exchange rates, impacts associated
with business acquisitions or dispositions, timing and magnitude of
restructuring activities, and revaluation of strategic investments,
amongst other items. The timing and amounts of these items are
uncertain and could have a substantial impact on GE HealthCare’s
results in accordance with GAAP.
Key Performance Indicators
Management uses the following metrics to provide a leading
indicator of current business demand from customers for products
and services.
- Organic orders growth: Rate of change period-over-period of
contractual commitments with customers to provide specified goods
or services for an agreed upon price, and excluding the effects of:
(1) recent acquisitions and dispositions with less than a full year
of comparable orders; and (2) foreign currency exchange rate
fluctuations in order to present orders on a constant currency
basis.
- Book-to-bill: Total orders divided by Total revenues within a
given financial period (e.g., quarter or FY).
Conference Call and Webcast Information
GE HealthCare will discuss its results during its live earnings
call today, October 30, 2024 at 8:30 am ET/7:30 am CT. The webcast
and accompanying slide presentation containing financial
information can be accessed by visiting the investor section of the
website at https://investor.gehealthcare.com/news-events/events. An
archived version of the webcast will be available on the website
after the call.
Forward-looking Statements
This release contains forward-looking statements. These
forward-looking statements might be identified by words, and
variations of words, such as “will,” “expect,” “may,” “would,”
“could,” “plan,” “believe,” “anticipate,” “intend,” “estimate,”
“potential,” “position,” “forecast,” “target,” “guidance,”
“outlook,” and similar expressions. These forward-looking
statements may include, but are not limited to, statements about
our business and expected financial performance, financial
condition, and results of operations, including revenue, revenue
growth, profit, taxes, earnings per share, and cash flows, and the
Company’s outlook; and the Company’s strategy, innovation, and
investments. These forward-looking statements involve risks and
uncertainties, many of which are beyond the Company’s control.
Factors that could cause the Company’s actual results to differ
materially from those described in its forward-looking statements
include, but are not limited to, operating in highly competitive
markets; the Company’s ability to successfully complete strategic
transactions; the actions or inactions of third parties with whom
the Company partners and the various collaboration, licensing, and
other partnerships and alliances the Company has with third
parties; demand for the Company’s products, services, or solutions
and factors that affect that demand; management of the Company’s
supply chain and the Company’s ability to cost-effectively secure
the materials it needs to operate its business; disruptions in the
Company’s operations; changes in third-party and government
reimbursement processes, rates, contractual relationships, and mix
of public and private payers, including related to government
shutdowns; the delayed China stimulus and the ongoing
anti-corruption campaign; the Company’s ability to attract and/or
retain key personnel and qualified employees; global geopolitical
and economic instability, including as a result of the conflict
between Ukraine and Russia, the conflict in the Middle East, and
the actions in the Red Sea region; public health crises, epidemics,
and pandemics and their effects on the Company’s business;
maintenance and protection of the Company’s intellectual property
rights, as well as maintenance of successful research and
development efforts with respect to commercially successful
products and technologies; the impact of potential information
technology, cybersecurity or data security breaches; compliance
with the various legal, regulatory, tax, privacy, and other laws to
which the Company is subject, such as the Foreign Corrupt Practices
Act and similar anti-corruption and anti-bribery laws globally, and
related changes, claims, inquiries, investigations, or actions; the
Company’s ability to control increases in healthcare costs and any
subsequent effect on demand for the Company’s products, services,
or solutions; the impacts related to the Company’s increasing focus
on and investment in cloud, edge, artificial intelligence, and
software offerings; the impact of potential product liability
claims; environmental, social, and governance matters; the
Company’s ability to operate effectively as an independent,
publicly-traded company; and the Company’s level of indebtedness,
as well as its general ability to comply with covenants under its
debt instruments and any related effect on the Company’s business.
Please also see the “Risk Factors” section of the Company’s Annual
Report on Form 10-K for the fiscal year ended December 31, 2023
filed with the U.S. Securities and Exchange Commission and any
updates or amendments it makes in future filings. There may be
other factors not presently known to the Company or which it
currently considers to be immaterial that could cause the Company’s
actual results to differ materially from those projected in any
forward-looking statements the Company makes. The Company does not
undertake any obligation to update or revise its forward-looking
statements except as required by applicable law or regulation.
About GE HealthCare Technologies Inc.
GE HealthCare is a leading global medical technology,
pharmaceutical diagnostics, and digital solutions innovator,
dedicated to providing integrated solutions, services, and data
analytics to make hospitals more efficient, clinicians more
effective, therapies more precise, and patients healthier and
happier. Serving patients and providers for more than 125 years, GE
HealthCare is advancing personalized, connected, and compassionate
care, while simplifying the patient’s journey across the care
pathway. Together our Imaging, Advanced Visualization Solutions,
Patient Care Solutions, and Pharmaceutical Diagnostics businesses
help improve patient care from diagnosis, to therapy, to
monitoring. We are a $19.6 billion business with approximately
51,000 colleagues working to create a world where healthcare has no
limits.
Follow us on LinkedIn, X, Facebook, Instagram, and Insights for
the latest news, or visit our website https://www.gehealthcare.com
for more information.
* Non-GAAP financial measure.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241029247090/en/
Investor Relations Contact: Carolynne Borders
+1-631-662-4317 carolynne.borders@gehealthcare.com
Media Contact: Jennifer Fox +1-414-530-3027
jennifer.r.fox@gehealthcare.com
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