GE HealthCare reported an impacted profit in Q1 2026 alongside a snipping of its full-year financial outlook, prompting the imaging specialist’s stock to drop by 13%.
In Q1, the imaging specialist achieved revenue of around $5.1bn, corresponding to year-over-year (YoY) growth of 7.4%.
Investors were mainly focused on GE HealthCare tempering its 2026 outlook. The company now expects 2026 earnings to fall in the $4.80-$5.00 range versus $4.95-$5.15 as outlined previously, with YoY growth now mooted to fall in the 4.6%-9% range, down from 7.9%-12.3% previously.
Explaining the rationale for its adjusted 2026 outlook, GE HealthCare’s CEO, Peter Arduini, explained: “Profitability in the first quarter was impacted by a pharmaceutical diagnostics supplier issue that has since been resolved. We saw significant increases in memory chips, oil and freight costs during the first quarter that we assume will impact the rest of 2026.
“Given these dynamics, we are taking a prudent approach and reducing our profit outlook but expect to offset more than half of the inflation impact with price and cost actions.”
These rising costs come amid the US-Israel conflict with Iran. Iran has closed the Strait of Hormuz, one of the world’s most critical maritime chokepoints, an action that is making the shipping of goods more expensive.
The diminished outlook disgruntled investors. GE HealthCare released its Q1 results ahead of market open, prompting its shares on the Nasdaq stock exchange to fall by over 13% to $59.49 by market close on 29 April, down from a market close of $68.50on 28 April. GE HealthCare has a market cap of around $27.5bn.
In an effort to quell investor sentiment, Arduini added that GE HealthCare was making “meaningful progress” and executing on a new wave of innovation “to accelerate future revenue and margin growth”.
Across the business, GE HealthCare’s dominant revenue stream was its imaging segment, with revenue of around $2.3bn indicative of a YoY uptick of 7.4%.
The company’s pharmaceutical diagnostics segment also charted a positive YoY revenue uptick of 21.7% to $770m, although AVS represented the second biggest revenue driver to imaging, rising by 8.2% to around $1.34bn.
During an investor call, Arduini provided more detail on the inflationary impact of current global trade dynamics. For GE HealthCare, the present circumstances are expected to result in an “approximate $100m increase in the price of memory chips”, which are critical components utilised in many of GE HealthCare’s products. Alongside this, the CEO anticipated an “increase in oil and freight costs of approximately $100m” and metal, with the gross impact of these total costs mooted to fall in the region of “approximately $250m, or $0.43 per share.
