GE HealthCare Technologies Inc. (NASDAQ:GEHC) reported stronger-than-expected second-quarter results on Wednesday, with record order growth and revenue exceeding Wall Street forecasts, sending shares about 9% higher in pre-market trading.
The medical technology company posted adjusted earnings of $1.13 per share, beating analysts’ consensus estimate of $1.04.
Revenue increased 5.7% year over year to $5.3 billion, ahead of the expected $5.26 billion.
Record Orders Strengthen Backlog
GE HealthCare delivered record organic order growth of 11.1% during the quarter, supported by strong demand across all of its operating segments.
The company reported a book-to-bill ratio of 1.15 times, while its order backlog expanded to $23.9 billion, providing greater visibility into future revenue.
Organic revenue rose 3.5%, driven by continued strength in the Pharmaceutical Diagnostics and Advanced Imaging Solutions businesses across the United States, Europe, the Middle East and Africa.
Patient Care Business Remains Under Pressure
Despite the strong overall performance, the Patient Care Solutions division continued to face headwinds.
Revenue for the segment declined 13.5% from a year earlier, contributing to a modest reduction in profitability.
Adjusted EBIT margin slipped 40 basis points to 14.2%, reflecting the weaker performance in Patient Care Solutions as well as higher costs for memory chips, oil and freight.
President and Chief Executive Officer Peter Arduini said: “We delivered record orders and backlog in the second quarter, with orders growth across every segment, demonstrating strong commercial execution, including the adoption of new products.”
Cash Flow Improves
The company’s results also benefited from tariff refunds, which contributed $129 million to net income and $23 million to adjusted EBIT during the quarter.
Cash flow from operating activities increased to $168 million, up $74 million from the prior year.
Free cash flow reached $68 million, representing an increase of $61 million year over year.
Full-Year Outlook Reaffirmed
GE HealthCare reaffirmed its financial guidance for full-year 2026.
The company continues to expect organic revenue growth of between 3.0% and 4.0%, with an adjusted EBIT margin of 15.4% to 15.7%.
Adjusted earnings per share are still projected to be between $4.80 and $5.00, with the midpoint representing year-over-year growth of approximately 6.8%.
GE HealthCare also continues to forecast free cash flow of around $1.6 billion for the year.
GE Healthcare Technologies stock price
