GE HealthCare Technologies Inc (GEHC, Financial) released its third-quarter earnings report on October 31, 2023. The company reported a 5% year-over-year revenue growth, with organic revenue growth standing at 6%. However, net income attributable to GEHC was $375 million, a decrease from $487 million in the prior year.
Financial Performance
GEHC reported total revenues of $4.8 billion, a 5% increase on a reported basis and a 6% increase on an organic basis year-over-year, driven by volume and price. The company's net income margin was 7.8%, down from 10.6% in the prior year, primarily impacted by standalone interest expense. Adjusted EBIT margin was 15.4%, up from the company's estimated 3Q'22 Standalone Adjusted EBIT margin of 14.2%.
Diluted EPS was $0.83, down from $1.07 in the prior year, while Adjusted EPS was $0.99, down from $1.20 in the prior year. Both comparisons were impacted by standalone interest expense. Cash flow from operating activities was $650 million, up $28 million year-over-year, primarily due to strong inventory management. Free cash flow was $570 million, up $22 million year-over-year.
Segment Performance
GEHC's Imaging segment reported revenues of $2.6 billion, a 5% increase year-over-year. The Ultrasound segment, however, reported a 1% decline in revenues to $815 million. The Patient Care Solutions segment reported a 9% increase in revenues to $764 million, while the Pharmaceutical Diagnostics segment reported a 13% increase in revenues to $589 million.
Outlook
For the full year 2023, GEHC expects organic revenue growth in the range of 6% to 8% year-over-year. The company also expects an Adjusted EBIT margin in the range of 15.0% to 15.5%, reflecting an expansion of 50 to 100 basis points versus 2022 Standalone Adjusted EBIT margin of 14.5%. Adjusted EPS is expected to be in the range of $3.75 to $3.85, raising the low end of the range, and representing 11% to 14% growth versus Standalone Adjusted EPS of $3.38 for 2022.
Commentary
GE HealthCare President and CEO Peter Arduini commented on the results, stating,
We delivered another strong quarter of revenue growth with margin performance demonstrating progress on productivity and price. Cash performance was strong as we leveraged lean principles to improve inventory management. We remain confident in our 2023 outlook as we continue to innovate for customers and patients."
Explore the complete 8-K earnings release (here) from GE HealthCare Technologies Inc for further details.
