GE HealthCare Technologies (GEHC) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenues were $4.8 billion, flat year-over-year, with 1% organic growth and 3% orders growth, as strong U.S. performance offset significant China headwinds from delayed stimulus and anti-corruption actions.

• Net income attributable to common stockholders was $428 million, up 2% year-over-year; operating income rose to $608 million, a 7% increase, with margin improvement to 12.6%.

• Adjusted EBIT margin was 15.3%, up 60 basis points year-over-year; adjusted EPS was $1.00, up 9% year-over-year.

• Growth in Pharmaceutical Diagnostics offset declines in Imaging and Ultrasound, which were impacted by lower China sales and inflation.

• Continued investment in R&D and AI-driven product innovation, including acquisitions and partnerships to enhance clinical and operational efficiencies.

Financial highlights

• Q2 2024 revenues reached $4.8 billion, with 1% organic growth year-over-year.

• Adjusted EBIT was $742 million (15.3% margin, up 60 bps YoY); adjusted EPS was $1.00, up 9% YoY.

• Net income attributable to common stockholders: $428 million, up from $418 million year-over-year.

• Free cash flow was $(182) million in Q2, impacted by timing of payments; full-year free cash flow is expected to be $1.8 billion.

• Book-to-bill ratio was 1.06x, with a $19 billion backlog.

Outlook and guidance

• Full-year 2024 organic revenue growth guidance lowered to 1–2% due to China market headwinds.

• Adjusted EBIT margin guidance raised to 15.7–16.0% (up 60–90 bps YoY).

• Adjusted EPS guidance reaffirmed at $4.20–$4.35 (7–11% growth) and free cash flow of ~$1.8 billion.

• Adjusted effective tax rate expected at 23–25%.

• Q3 organic revenue growth expected at ~1%, with Q4 anticipated to be the strongest quarter for both revenue and margin.