So far, so good: With its first fiscal quarter in the books as a solo business, GE HealthCare posted better-than-expected revenues and said it expects its rate of growth to hold steady through the remainder of the year.
The company’s sales grew 8% year-over-year—to $4.7 billion compared to 2022’s first-quarter haul of $4.3 billion—even as foreign currency exchange rates tampered growth by 4%.
That just outpaced its previous projections of 5% to 7% for the year and included similar-sized expansions across its core imaging, ultrasound and patient monitoring divisions. Meanwhile, its slightly smaller pharmaceutical diagnostics unit, which includes contrast media and imaging agents, grew by 15%.
“We saw strong revenue growth across all of our business segments and regions as supply chain challenges eased,” President and CEO Peter Arduini said in a release. “We continue to expect 5% to 7% organic revenue growth for 2023 given increased fulfillment and commercial execution.”
The company also posted higher-than-anticipated adjusted earnings-per-share, at 85 cents. However, that apparently wasn’t enough to satisfy investors: the company’s stock fell more than 8% Tuesday morning following the news, down to about $80.25.
At the same time, GE HealthCare’s net income dipped to $372 million, just below the $389 million it saw during the same three months the year before. Increased costs were driven in part by interest expenses and other financial charges, the company said.
After GE HealthCare left the corporate conglomerate nest in the first week of January, leadership pledged the standalone outfit would operate as a “more focused, more agile” company, with a disciplined approach to tuck-in M&A.
One of the first examples came just weeks later with its acquisition of the AI ultrasound company Caption Health—bought for a previously undisclosed $150 million in cash, including $13 million in milestone payments, according to GE HealthCare’s SEC filings this week.
Caption Health, a Fierce Medtech Fierce 15 winner, develops tech that guides clinicians through the somewhat tricky steps of conducting an echocardiogram, to help capture clearer pictures of the heart.
That will be folded into GE HealthCare’s $3 billion ultrasound business, with the goal of using AI guidance programs to help put ultrasound imaging into the hands of more healthcare professionals.
In its first-quarter earnings report, ultrasound brought in $859 million in revenue, up 5% as the company was able to improve on its backlog as supply chain issues eased. MRI machines, CT scanners and X-ray hardware, meanwhile, raked up $2.5 billion, for an 8% gain. Finally, patient care and monitoring solutions reported a 9% sales increase to $781 million for the quarter.