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Lower Volume Likely to Hurt GE HealthCare's (GEHC) Q2 Earnings
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GE HealthCare Technologies Inc. (GEHC - Free Report) is scheduled to report second-quarter 2024 results on Jul 31, before market open.
In the last reported quarter, the company’s adjusted earnings per share of 90 cents met the Zacks Consensus Estimate.
Let’s take a look at how things might have shaped up for GEHC prior to the announcement.
Factors at Play
GE HealthCare is expected to have been hurt by lower volume of sales during the second quarter. However, consistent new product introductions (NPIs) and backlog fulfillment on the back of easing supply challenges are likely to have provided a cushion. Further, improved pricing and successful commercial execution might have added to the top line.
In terms of operating segments, the Imaging business is expected to have benefited from health care providers’ continued investment in capacity to improve patient care and productivity. Volume is expected to have remained strong for surgical procedures, driving demand for Imaging.
The company’s deal with Salud Digna to deploy digital solutions is likely to have boosted Computed tomography (CT), Magnetic resonance (MR) and ultrasound systems across Mexico. In May, GEHC launched head-only MR scanner, SIGNA MAGNUS, to address the limitations of whole-body MR scanners. The Revolution RT was also launched in May to streamline the standard of care for cancer patients. In April, it launched Voluson Signature 20 and 18 ultrasound systems.
Overall, imaging demand is healthy, especially for Molecular Imaging, Computed Tomography and Magnetic Resonance, supporting top-line growth. Moreover, the company completed the acquisition of MIM Software in April. GEHC added IM SurePlan and MIM Symphony families, MIM Maestro and MIM Encore, among others, to its product portfolio. These products are likely to have brought additional revenues during the soon-to-be-reported quarter.
Within Ultrasound, organic revenue growth is expected to have been driven by the performance of cardiovascular, general imaging, and women’s health products on growing NPIs and improving supply-chain fulfillment. In February, the company launched its next-level LOGIQ ultrasound portfolio, which included the new LOGIQ Totus enabling advanced precision care.
The launch of the next-level LOGIQ portfolio is expected to have had a positive impact on the company’s Ultrasound business. The company also launched Prostate Volume Assist urology-based artificial intelligence (AI) software in March, which is likely to have assisted urologists by offering a solution that improves workflow and quickly captures prostate volume.
Within the Patient Care Solutions business, the company is expected to have witnessed organic revenue decline due to unfavorable volume, partially offset by improved pricing. Similar to the first quarter, GEHC might have benefited from tools-side production for highly constrained products in the second quarter.
The Pharmaceutical Diagnostics business is expected to have delivered strong organic revenue growth, driven by favorable prices, recovery of global elective procedures and stabilization of supply.
However, a strong commercial performance in the second quarter might have been primarily dented by a challenging macroeconomic environment and currency headwinds.
GE HealthCare Technologies Inc. Price and EPS Surprise
The Zacks Consensus Estimate for revenues is pegged at $4.89 billion, implying growth of 1.5% year over year.
The Zacks Consensus Estimate for earnings per share is pinned at 97 cents, projecting an improvement of 5.4% from the prior-year quarter’s level.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating on earnings. However, this is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this reporting cycle.
The company’s shares have surged 25.3% year to date. MCK’s earnings missed estimates in the last reported quarter. McKesson has a four-quarter average earnings surprise of 8.38%.
Inari Medical (NARI - Free Report) has an Earnings ESP of +45.95% and a Zacks Rank of 3 at present.
Its shares have lost 15.4% year to date. NARI’s earnings missed estimates in the last reported quarter. Inari Medical has a trailing four-quarter average earnings surprise of 130.74%.
AxoGen (AXGN - Free Report) has an Earnings ESP of +25.00% and a Zacks Rank of 3 at present.
The stock has risen 33.5% year to date. AXGN’s earnings beat estimates in the last reported quarter. AxoGen has a trailing four-quarter average earnings surprise of 66.46%.
Image: Bigstock
Lower Volume Likely to Hurt GE HealthCare's (GEHC) Q2 Earnings
GE HealthCare Technologies Inc. (GEHC - Free Report) is scheduled to report second-quarter 2024 results on Jul 31, before market open.
In the last reported quarter, the company’s adjusted earnings per share of 90 cents met the Zacks Consensus Estimate.
Let’s take a look at how things might have shaped up for GEHC prior to the announcement.
Factors at Play
GE HealthCare is expected to have been hurt by lower volume of sales during the second quarter. However, consistent new product introductions (NPIs) and backlog fulfillment on the back of easing supply challenges are likely to have provided a cushion. Further, improved pricing and successful commercial execution might have added to the top line.
In terms of operating segments, the Imaging business is expected to have benefited from health care providers’ continued investment in capacity to improve patient care and productivity. Volume is expected to have remained strong for surgical procedures, driving demand for Imaging.
The company’s deal with Salud Digna to deploy digital solutions is likely to have boosted Computed tomography (CT), Magnetic resonance (MR) and ultrasound systems across Mexico. In May, GEHC launched head-only MR scanner, SIGNA MAGNUS, to address the limitations of whole-body MR scanners. The Revolution RT was also launched in May to streamline the standard of care for cancer patients. In April, it launched Voluson Signature 20 and 18 ultrasound systems.
Overall, imaging demand is healthy, especially for Molecular Imaging, Computed Tomography and Magnetic Resonance, supporting top-line growth. Moreover, the company completed the acquisition of MIM Software in April. GEHC added IM SurePlan and MIM Symphony families, MIM Maestro and MIM Encore, among others, to its product portfolio. These products are likely to have brought additional revenues during the soon-to-be-reported quarter.
Within Ultrasound, organic revenue growth is expected to have been driven by the performance of cardiovascular, general imaging, and women’s health products on growing NPIs and improving supply-chain fulfillment. In February, the company launched its next-level LOGIQ ultrasound portfolio, which included the new LOGIQ Totus enabling advanced precision care.
The launch of the next-level LOGIQ portfolio is expected to have had a positive impact on the company’s Ultrasound business. The company also launched Prostate Volume Assist urology-based artificial intelligence (AI) software in March, which is likely to have assisted urologists by offering a solution that improves workflow and quickly captures prostate volume.
Within the Patient Care Solutions business, the company is expected to have witnessed organic revenue decline due to unfavorable volume, partially offset by improved pricing. Similar to the first quarter, GEHC might have benefited from tools-side production for highly constrained products in the second quarter.
The Pharmaceutical Diagnostics business is expected to have delivered strong organic revenue growth, driven by favorable prices, recovery of global elective procedures and stabilization of supply.
However, a strong commercial performance in the second quarter might have been primarily dented by a challenging macroeconomic environment and currency headwinds.
GE HealthCare Technologies Inc. Price and EPS Surprise
GE HealthCare Technologies Inc. price-eps-surprise | GE HealthCare Technologies Inc. Quote
Q2 Estimates
The Zacks Consensus Estimate for revenues is pegged at $4.89 billion, implying growth of 1.5% year over year.
The Zacks Consensus Estimate for earnings per share is pinned at 97 cents, projecting an improvement of 5.4% from the prior-year quarter’s level.
What Our Model Suggests
Per our proven model, a stock with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold), along with a positive Earnings ESP, has higher chances of beating on earnings. However, this is not the case here, as you will see below.
Earnings ESP: The company has an Earnings ESP of 0.00% at present. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: The company currently carries a Zacks Rank #3.
Stocks Worth a Look
Here are some medical stocks worth considering as these have the right combination of elements to post an earnings beat this reporting cycle.
McKesson (MCK - Free Report) has an Earnings ESP of +0.19% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
The company’s shares have surged 25.3% year to date. MCK’s earnings missed estimates in the last reported quarter. McKesson has a four-quarter average earnings surprise of 8.38%.
Inari Medical (NARI - Free Report) has an Earnings ESP of +45.95% and a Zacks Rank of 3 at present.
Its shares have lost 15.4% year to date. NARI’s earnings missed estimates in the last reported quarter. Inari Medical has a trailing four-quarter average earnings surprise of 130.74%.
AxoGen (AXGN - Free Report) has an Earnings ESP of +25.00% and a Zacks Rank of 3 at present.
The stock has risen 33.5% year to date. AXGN’s earnings beat estimates in the last reported quarter. AxoGen has a trailing four-quarter average earnings surprise of 66.46%.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.