GE Healthcare Technologies announced impressive third-quarter financial results, surpassing analysts’ expectations. The company’s shares experienced an upward trend in early trading.
Strong Earnings and Sales Performance
GE Healthcare (ticker: GEHC) revealed adjusted third-quarter earnings per share (EPS) of 99 cents generated from $4.8 billion in sales. The Wall Street consensus forecasted 90 cents in EPS and $4.8 billion in sales, making GE Healthcare’s results even more impressive.
Sales witnessed a 5% year-over-year growth on a comparable basis, while operating profit margins stood at 15.4%. These margin figures surpassed Wall Street’s projections, which expected approximately 14%.
CEO’s Positive Outlook
Peter Arduini, GE Healthcare’s CEO, expressed satisfaction with the company’s performance, stating, “We delivered another strong quarter of revenue growth with margin performance demonstrating progress on productivity and price.” He further emphasized their commitment to innovation and their optimistic outlook for the future: “We remain confident in our 2023 outlook as we continue to innovate for customers and patients.”
Consistent Cash Flow and Guidance
The company reported a free cash flow of $570 million. Furthermore, GE Healthcare did not revise its full-year EPS guidance range, which remains at $3.70 to $3.85. This guidance implies a fourth-quarter EPS range of 94 cents to $1.09, slightly lower than Wall Street’s estimated $1.14 per share.
Positive Market Response
Following the release of these strong financial results, GE Healthcare stock rose by 4.5%. In comparison, S&P 500 and Dow Jones Industrial Average futures remained flat.
It is worth noting that GE Healthcare’s stock has already demonstrated a 13% increase so far this year. In contrast, the S&P 500 has risen by approximately 9% over the same period.
Future Considerations
Investors and analysts eagerly await the conference call, scheduled for 8:30 a.m. Eastern time, where management will discuss the results. Notably, participants will be particularly interested in any indications regarding the outlook for medical equipment demand in 2024.
Analysts’ Previous Outlook
Conclusion
Currently trading at less than 15 times estimated 2024 earnings, GE Healthcare shares present an attractive investment opportunity. In March, these shares were trading at around 20 times estimated 2024 earnings. It is worth highlighting that 2024 earnings estimates have only moderately increased from $4.26 to $4.30 per share during this timeframe.