GE Healthcare's recent financial performance has garnered attention as the company reports a strong earnings beat and strategic guidance, propelling its stock performance over the past year. In the three months ending December 31, the company's revenue increased 2% year-over-year, reaching $5.32 billion. The adjusted earnings per share (EPS) came in at $1.45, significantly surpassing the consensus estimate of $1.26. This solid performance has sparked interest among investors and analysts, highlighting the company's steady growth trajectory.
A closer examination of GE Healthcare's operations reveals a slight improvement in its China business, demonstrated by a growth in orders during the fourth quarter. This order growth accelerated to 6%, marking the best performance since the second quarter of 2023. The company concluded the year with a record backlog of $19.8 billion, which represents an increase of $200 million from the end of September. This achievement underscores the company's ability to maintain a strong pipeline of future business.
GE Healthcare's book-to-bill ratio, standing at 1.09, marks its highest point since being spun off from its former parent company, General Electric, in early 2023. This ratio indicates that the company is booking more orders than it is billing, suggesting positive growth prospects. Furthermore, GE Healthcare has identified Flyrcado as a significant growth opportunity, projecting it could generate at least $500 million in annual sales by 2028.
The company's strategic focus is also reflected in its operating margin, which it believes can expand to "20-plus percent." For 2025, GE Healthcare has provided guidance for an adjusted EPS in the range of $4.61 to $4.75, with the midpoint exceeding the LSEG consensus estimate of $4.66. The full-year adjusted operating margin is expected to be between 16.7% and 16.8% for 2025, factoring in a 10 basis point impact from tariffs.
Despite some challenges anticipated in China sales, which are expected to be negative in the first half of 2025, GE Healthcare anticipates sequential improvement in the third and fourth quarters. This outlook reflects the company's confidence in its ability to navigate market fluctuations and sustain growth.
The separation from General Electric in 2023 has enabled GE Healthcare to invest more aggressively in research and development. This strategic move has led to significant product innovations, particularly in artificial intelligence, positioning the company at the forefront of technological advancements in healthcare.