GE HealthCare Technologies Inc. (NASDAQ:GEHC) reported first-quarter results that came in below analyst expectations and reduced its full-year profit guidance, sending shares down 6% in premarket trading.
Adjusted earnings per share were $0.99, missing the consensus estimate of $1.05 by $0.06.
Revenue rose 7.4% year over year to $5.1 billion, slightly above the $5.03 billion forecast and up from $4.8 billion in the same period last year.
Organic revenue increased 2.9%, supported by growth in Pharmaceutical Diagnostics, Advanced Visualization Solutions, and Imaging. However, profitability declined, with net income margin falling to 7.6% from 11.8% a year earlier. Adjusted EBIT margin dropped 150 basis points to 13.5%, pressured by tariffs, weaker performance in Patient Care Solutions, and a temporary issue with a PDx supplier that has since been resolved.
The company lowered its full-year 2026 adjusted EPS guidance to a range of $4.80 to $5.00, down from its previous forecast of $4.95 to $5.15. The midpoint of $4.90 represents a reduction from the earlier midpoint of $5.05.
GE HealthCare also reduced its adjusted EBIT margin outlook to 15.4%–15.7% from 15.8%–16.1% and cut its free cash flow guidance to approximately $1.6 billion from $1.7 billion. It maintained its organic revenue growth expectation of 3.0% to 4.0%.
“Profitability in the first quarter was impacted by a PDx supplier issue that has since been resolved. We saw significant increases in memory chips, oil and freight costs during the first quarter that we assume will impact the rest of 2026,” said Peter Arduini. “Given these dynamics, we are taking a prudent approach and reducing our profit outlook but expect to offset more than half of the inflation impact with price and cost actions.”
During the quarter, the company generated $290 million in operating cash flow and $112 million in free cash flow.