GE HealthCare Beat Earnings Estimates. The Stock Dropped.

Coming into Wednesday trading, GE HealthCare stock was up 2% this year and down 7% over the past 12 months. Tariffs have raised costs, hitting earnings growth and investor sentiment. (JADE GAO/AFP via Getty Images)

Key Points

• GE HealthCare Technologies reported third-quarter earnings per share of $1.07 on sales of $5.1 billion.
• The company’s operating profit margins decreased to 14.8% from 16.3% year over year, primarily due to tariff impacts.
• GE HealthCare updated its 2025 EPS guidance to a range of $4.51 to $4.63, with fourth-quarter EPS projected at $1.45.

GE HealthCare Technologies delivered better-than-expected third-quarter earnings, despite tariff headwinds. Shares didn’t get a bump, though.

On Wednesday, the imaging technology supplier reported third-quarter earnings per share of $1.07 from sales of $5.1 billion. Wall Street was looking for EPS of $1.05 from sales of $5.1 billion, according to FactSet. A year ago, in the third quarter of 2024, GE Healthcare reported EPS of $1.14 from sales of $4.9 billion.

Tariffs have impacted costs. Excluding their impact, EPS would have been up year over year, according to the company.

Looking ahead, management expects 2025 EPS to land between $4.51 and $4.63. The prior range was $4.43 to $4.63. Guidance implies fourth-quarter earnings per share of about $1.45. Wall Street currently projects $1.39.

Shares were up in premarket trading, but slid back to $77.35, down 2.5% on Wednesday, while the S&P 500 finished flat and the Dow Jones Industrial Average dropped 0.2%.

“We delivered robust orders with growth across all segments in the third quarter,” said CEO Peter Arduini. “We continue to see momentum with commercial execution…as a result of our increased R&D investments, we are entering a new wave of innovation and, coupled with our focus on lean, we expect to accelerate top and bottom line growth.”

Comparable-order growth was 6% year over year in the quarter. What’s more, orders exceeded sales. Book-to-bill was about 1.1 times in the quarter.

Imaging sales grew 5% year over year to $2.3 billion. Advanced visualization sales, including products for cardiology and oncology, rose 7% to $1.3 billion. Pharmacological diagnostic sales grew 20% to $749 million. Patient Care sales declined 6% to $731 million.

Operating profit margins landed at 14.8%, down from 16.3% a year ago. Excluding tariff impacts, margins would have been 16.6%, up year over year, according to the company.

Overall, the numbers look roughly as expected. Citi analyst Joanne Wuensch called the quarter “straightforward” in a Wednesday report.

Expectations don’t appear to have been too high coming into earnings. Through Tuesday trading, GE HealthCare stock was up 2% this year and down 7% over the past 12 months.

Write to Al Root at allen.root@dowjones.com