GE HealthCare Raises Profit Forecast Amid Strong U.S. Medical Device Sales

GE HealthCare (NASDAQ:GEHC) Technologies announced on Wednesday that it exceeded third-quarter profit expectations, attributing this success to strong demand for medical devices in the United States. This increase helped offset sluggish sales in China, where anti-corruption campaigns have impacted the healthcare sector.

The company raised its annual profit forecast, increasing it from the previously stated $4.20 to at least $4.25, while keeping the upper estimate at $4.35. This revision aligns with the average analyst estimate of $4.25 per share compiled by LSEG.

CEO Peter Arduini emphasized the growth in sales and orders, particularly in the U.S.; the U.S. market reached $2.25 billion, reflecting an 8% increase. While the U.S. market demonstrated strong performance across all segments, sales in China fell by 22% to $564 million.

The rising demand for heart procedures and elective surgeries such as hip and knee replacements has been a boon for medical device manufacturers. This trend is particularly notable among older adults who postponed these procedures during the pandemic.

Despite the positive performance, GE HealthCare expects revenue growth to fall within the lower end of its previously forecasted range of 1% to 2% for the year, taking into account the ongoing challenges in the Chinese market. Last year, China accounted for 14.2% of the company's revenue.

In recent quarters, the company’s sales have been affected by a stagnation in China's healthcare sector due to an anti-corruption campaign targeting physician bribery in drug and medical equipment sales, as well as delays in China's 2024 stimulus plans.

In the third quarter, GE HealthCare's total sales reached $4.86 billion, slightly falling short of the $4.87 billion estimate. However, the company reported an earnings per share of $1.14, exceeding the expected $1.05 when excluding one-time items.