GE HealthCare Technologies (GEHC) Q3 2024 earnings summary

Executive summary

• Achieved 1% organic revenue growth in Q3 2024, with strong U.S. and Pharmaceutical Diagnostics performance offsetting China softness; ex-China, sales grew 5% and orders 4%.

• Net income attributable to GE HealthCare for Q3 2024 was $470 million (9.7% margin), up 25% year-over-year; adjusted EBIT was $795 million (16.3% margin), up 7%.

• Backlog reached $19.6 billion, up $1.2 billion year-over-year, driven by services and multi-year agreements.

• Raised the low end of full-year adjusted EBIT margin and EPS guidance ranges due to strong margin performance.

• Continued investment in innovation, including FDA approval of Flyrcado and acquisition of MIM Software, supports future growth.

Financial highlights

• Q3 2024 revenues were $4.9 billion, up 1% organically year-over-year; service sales up 2%, product sales flat.

• Adjusted EBIT margin was 16.3%, up 90 basis points year-over-year; adjusted EPS was $1.14, up 15%.

• Free cash flow was $651 million for Q3, up $81 million year-over-year.

• Adjusted gross margin expanded 150 basis points, driven by cost productivity and higher-margin products.

• Book-to-bill ratio at 1.04, indicating strong order intake.

Outlook and guidance

• Full-year 2024 organic revenue growth expected at the lower end of 1%-2% guidance due to China softness.

• Adjusted EBIT margin guidance raised to 15.8%-16.0%, up 70-90 basis points from 2023.

• Adjusted EPS guidance raised to $4.25-$4.35, reflecting 8%-11% year-over-year growth.

• Free cash flow for 2024 expected to be approximately $1.8 billion.

• Adjusted effective tax rate expected at the lower end of 23%-25%.