GE HealthCare Technologies NASDAQ: GEHC reported first-quarter 2026 results that management said landed at the high end of expectations on revenue, while profits and cash flow guidance for the full year were reduced to reflect higher input costs and a first-quarter supplier-related recall in Pharmaceutical Diagnostics (PDX).
First-quarter results: Revenue growth meets expectations, margins pressured
President and CEO Peter Arduini said the company was “pleased with the top-line growth that came in at the high end of our expectations,” citing strength in pharmaceutical diagnostics, Advanced Imaging Solutions and the imaging businesses, along with “strong services growth.” Arduini added that the capital equipment backdrop remains supportive, with “healthy customer demand globally with resilient procedure growth,” and pointed to “solid performance in orders, book-to-bill, and backlog.”
Vice President and CFO Jay Saccaro said GE HealthCare delivered revenue of $5.1 billion, representing 2.9% organic growth year over year. Regionally, Saccaro cited double-digit reported revenue growth in EMEA and the rest of world and mid-single-digit growth in the U.S., while China revenue declined year over year but “improved sequentially” and was “in line with our expectations.”
Orders grew 1.1% against a double-digit comparison a year ago, and the company posted a 1.07x book-to-bill and a record backlog of $21.8 billion, up $1.2 billion year over year. GE HealthCare reported $112 million in free cash flow for the quarter.
Profitability was weaker. Saccaro said management was “disappointed with the adjusted EBIT margin of 13.5% and adjusted EPS of $0.99,” noting that adjusted EPS included approximately $0.16 of tariff impact. Adjusted EBIT margin was down roughly 150 basis points year over year, reflecting tariffs, declines in Patient Care Solutions (PCS), and the PDX supplier issue, partially offset by volume, pricing, and contract settlements, according to Saccaro.
Inflation and supplier issue drive guidance reduction
Arduini said first-quarter profit was impacted by “a recall associated with a PDX supplier that has since been resolved,” and that the company began to see “more significant increases in material cost” later in the quarter. Management reduced profit and free cash flow guidance for 2026 as a result.
Arduini outlined approximately $250 million of gross inflation impact for 2026 before mitigation, which he said equates to about $0.43 per share. He attributed the increase primarily to two items:
- An approximate $100 million increase in the price of memory chips
- An approximate $100 million increase in oil and freight costs
Arduini also cited roughly $50 million of other inflation impacts, including metals such as tungsten. The company expects to offset “more than half” of the inflation impact through pricing and cost actions, but Arduini said GE HealthCare is reducing full-year adjusted EPS guidance by $0.15 for the remaining inflation impact. Even with the reduction, he said the company expects to deliver “mid to high single-digit adjusted EPS growth.”
On the call, Saccaro said the company’s updated assumptions reflect commodity costs staying “at elevated levels,” without adding extra cushion beyond current conditions. He also said pricing actions largely affect new orders and therefore provide more benefit in the second half of 2026 and into 2027.
Segment performance: Imaging and PDX grow; PCS declines
In Imaging, Saccaro said organic revenue grew 3.8%, driven by “robust growth in the U.S. and EMEA, particularly in CT and X-ray.” He pointed to strong demand for the company’s CT lineup, including Revolution Vibe for cardiac exams. Segment EBIT benefited from volume but declined year over year due to tariffs; excluding tariffs, Saccaro said margins would have been “accretive year-over-year.”
Advanced Visualization Solutions posted 4.4% organic revenue growth, with EBIT margin up 120 basis points year over year on volume and contract settlements, partially offset by tariffs, according to Saccaro.
PCS organic revenue declined 8.1%, which Saccaro attributed primarily to “select large monitoring installations more concentrated in the second half of the year.” Segment EBIT margin declined 500 basis points on lower volume and tariff impacts. Arduini said large monitoring deals tend to be “more second half loaded,” and that customers are also awaiting a new premium anesthesia product, which Saccaro said is expected to receive U.S. clearance in the third quarter. Management said it is taking actions focused on backlog conversion, price, and cost structure.
PDX delivered 9.7% organic revenue growth, driven by global contrast media strength, pricing execution, and radiopharmaceutical growth. However, Saccaro said PDX EBIT margin declined due to the “discrete supplier issue,” planned radiopharmaceutical pipeline investments, and the Nihon Medi-Physics acquisition.
When asked about the first-quarter shortfall, Saccaro said the supplier quality issue in PDX had roughly $0.05 of EPS impact and occurred late in the quarter, leading to both a write-off and sales shortfall.
Product pipeline updates: Photon-counting CT, MR, radiopharmaceuticals, and contrast innovation
Arduini highlighted regulatory clearances in the U.S. and Japan for Photonova Spectra, the company’s photon-counting CT platform. He said customer feedback on image quality has been “extremely positive,” and management is working on site readiness and building a pipeline for future sales. Arduini said GE HealthCare expects revenue contribution from key imaging new product introductions to begin in the first half of 2027, reflecting typical imaging order conversion timelines.
In radiopharmaceuticals, Arduini said Flyrcado is continuing to ramp, with “a nearly 80% increase in doses since late January,” including “over 390 doses” for the week ended April 17. Saccaro added that the annual run rate increased from roughly $25 million to about $46 million in April. Arduini said progress supports confidence in the company’s medium-term target of $500 million or more in annual revenue by 2028.
Arduini also discussed a gadolinium-free, manganese-based MRI contrast agent in development. He said the first patient has been dosed in a combined phase II/phase III study, and the program has FDA Fast Track designation. Arduini said that without those accelerants, a product could be “out in the 20, 30 range,” but if successful, this one “could be a 2029 type molecule introduction to the marketplace.”
Portfolio and structure changes, capital allocation, and 2026 outlook
GE HealthCare completed its acquisition of Intelerad in the first quarter. Saccaro said Intelerad’s performance was in line with prior expectations and that the company continues to expect “double-digit sales growth” and an “EBITDA margin north of 30%,” though the deal is expected to be “slightly dilutive” in the first year after considering integration costs and interest expense. He described the 2026 impact as “fairly neutral” to the bottom line, with a “little bit of positive contribution” expected in 2027.
Management also announced an organizational change, combining Imaging and AVS into a new segment called Advanced Imaging Solutions led by Phil Rackliffe, reducing the company from four segments to three: AIS, PDX, and PCS. Arduini said the change is intended to sharpen disease-state focus, accelerate innovation, and reduce costs. The company also announced a new global markets region led by Catherine Estrampes.
On capital allocation, Saccaro said the company repaid $500 million of debt in the first quarter, returned capital through its dividend and repurchased about $100 million of shares, and plans to continue prioritizing organic investment, disciplined M&A, and share repurchases when valuations are attractive.
For 2026, GE HealthCare maintained its 3% to 4% organic sales growth outlook. Saccaro said the company continues to assume a cautious outlook for China and expects limited revenue impact from the conflict in the Middle East, which he said represents approximately 3% of total company revenue. The company now expects adjusted EBIT margin of 15.4% to 15.7% and adjusted EPS of $4.80 to $5.00, and reduced full-year free cash flow expectations to approximately $1.6 billion.
For the second quarter, management guided to 3% to 4% organic revenue growth and said adjusted EPS is expected to decline in the low single digits year over year, reflecting the timing of inflation and mitigation actions. The company said it will provide a recast of financials for the new AIS segment with second-quarter reporting.
About GE HealthCare Technologies NASDAQ: GEHC
GE HealthCare Technologies NASDAQ: GEHC is a global medical technology and diagnostics company that develops, manufactures and markets a broad range of products and services for healthcare providers. Its portfolio centers on diagnostic imaging systems, including MRI, CT, PET and X-ray modalities, as well as ultrasound equipment. The company also supplies patient monitoring and anesthesia delivery systems, interventional and surgical imaging solutions, and molecular imaging technologies used in both clinical care and research settings.
In addition to hardware, GE HealthCare offers software, analytics and lifecycle services aimed at improving clinical workflows and equipment uptime.
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