GE Healthcare Q3 2024 $GEHC (-6 %)

Financial performance:

Revenue: GE HealthCare generated revenue of USD 4.9 billion in the third quarter of 2024, which corresponds to organic growth of 1% compared to the previous year.

Net income: For the nine months ended September 30, 2024, net income from continuing operations was $1,312 million.

Adjusted EBIT: Adjusted EBIT for the third quarter of 2024 amounted to USD 795 million, with an adjusted EBIT margin of 16.3%, an increase of 90 basis points year-on-year.

Balance sheet overview:

Cash and cash equivalents: As at September 30, 2024, the Company had cash, cash equivalents and restricted cash totaling USD 3,568 million.

Total debt: Total debt was USD 10,312 million as at September 30, 2024, an increase from USD 9,442 million at the end of 2023.

Details of the income statement:

Earnings per share (EPS): Adjusted EPS for the third quarter of 2024 was USD 1.14, an increase of 15% year-on-year.

Overview of cash flow:

Free cash flow: Free cash flow for the third quarter of 2024 was $651 million, an increase of $81 million year-over-year.

Operating cash flow: For the nine months ended September 30, 2024, operating activities generated USD 1,042 million.

Key figures and profitability metrics:

Book-to-bill ratio: The book-to-bill ratio was 1.04x, indicating a healthy level of incoming orders relative to sales.

Segment information:

Pharmaceutical Diagnostics (PDx): Sales in the third quarter of 2024 amounted to USD 625 million, an increase of 7% year-on-year, with a segment EBIT margin of 30.9%.

Patient Care Solutions (PCS): Sales amounted to USD 779 million, an increase of 2% year-on-year, with a segment EBIT margin of 10.6%.

Advanced Visualization Solutions (AVS): Sales were flat at USD 1,216 million, while the segment EBIT margin decreased by 190 basis points to 19.0%.

Competitive position:

The company is leveraging its innovation pipeline and strong order backlog to gain a competitive advantage, particularly in the US market.

Forecasts and management statement:

Outlook for 2024: The company expects organic sales growth of 1% to 2%, while the adjusted EBIT margin is expected to increase by 70 to 90 basis points. Adjusted EPS is expected to increase by 8% to 11%.

Management is optimistic about the fundamentals of the business, but points to weakness in the Chinese market due to ongoing anti-corruption campaigns and delayed economic stimulus.

Risks and opportunities:

Opportunities include the expected doubling of demand for iodine-based contrast agents in the coming decade, driven by the global prevalence of chronic diseases.

Risks arise from geopolitical and economic instability, particularly in China, which could affect orders and sales in the near future.

Summary of findings:

GE HealthCare delivered a solid financial performance in Q3 2024 with sales growth and improved profitability metrics. The company manages its cash flow effectively and maintains a strong balance sheet. Despite the challenges in the Chinese market, the company is well positioned for future growth with its robust innovation pipeline and strategic focus on key segments such as Pharmaceutical Diagnostics and Patient Care Solutions. The outlook for 2024 remains positive, with expectations of continued sales and profit growth.

Positive aspects:

Revenue growth: GE HealthCare reported mid-single digit sales and order growth, excluding China. This was supported by continued strength in the US market and good performance in Pharmaceutical Diagnostics (PDx).

Margin expansion: The company experienced significant margin expansion and increased its full year 2024 adjusted EBIT margin guidance.

Order backlog growth: Strong order backlog growth, mainly driven by services, indicates a healthy pipeline of future business.

Strategic acquisition: The acquisition of Monte Carlo Dosimetry strengthens GE HealthCare's and MIM Software's position as a leading provider of comprehensive, vendor-neutral dosimetry tools for theranostics and improves their competitiveness.

Adjusted EPS growth: The company raised the lower end of its guidance for adjusted EPS, reflecting confidence in its earnings potential.

Negatives:

Weakness in the Chinese market: Due to continued market weakness in China, impacted by the ongoing anti-corruption campaign and delayed stimulus measures, the company is trending towards the lower end of its organic revenue growth range.

Operational challenges in China: The anti-corruption campaign and the delay of the 2024 stimulus program in China have led to delayed orders and sales, negatively impacting the company's performance in this important market.

Margin pressure in the segment: In the Advanced Visualization Solutions (AVS) segment, the EBIT margin fell by 190 basis points year-on-year, indicating margin pressure in this area.

Increase in debt: Total debt increased to USD 10,312 million as of September 30, 2024, compared to USD 9,442 million at the end of 2023, which could affect the company's leverage and financial flexibility.

Geopolitical and economic risks: The company faces risks from geopolitical and economic instability, particularly in China, which could continue to affect orders and sales in the near future.

Sale 1 of 4 due to error limit instead of stop.

So after about 7 years I am parting with General Electric.

What made me buy in 2016/17? Share price performance and high dividend yield.

What was the result, pension provisions and mismanagement halved the share price again, dividend was canceled.

$GE (+0 %) Restructuring case.

After 7 years, 2 with dividends, I have now reached my entry price again. There were also spin-off shares $GEV (+0 %) and $GEHC (-6 %) I hold them for less than 5,000 euros.

What have I learned? Despite blue stocks, US and dividend stocks, even aristocrats at the time, things never go as expected.

Upcoming events this week:

Monday

• Earnings reports from McDonald's ($MCD (-0,67 %) ), Caterpillar Inc. ($CAT (-2,91 %) ), Palantir Technologies Inc. ($PLTR (-2,37 %) ), ON Semiconductor Corp. ($ON (-9,48 %) ) and Tyson Foods Inc. ($TSN (-1,29 %) )
• Speech by Atlanta Fed President Raphael Bostic
• S&P final U.S. Services PMI (January)
• ISM Services PMI (January)
• Senior Loan Officer Survey

Tuesday

• Earnings Reports from Eli Lilly
  $LLY (-0,66 %) ), Amgen ($AMGN (-4,87 %) ), BP ($BP. (-3,53 %) ), Gilead Sciences Inc. ($GILD (-3,24 %) ), Ford ($F (-6,23 %) ), GE HealthCare Technologies Inc. ($GEHC (-6 %) ) and Snap Inc. ($SNAP (-7,54 %) )
• Speeches by Minneapolis Fed President Neel Kashkari, Cleveland Fed President Loretta Mester and Philadelphia Fed President Patrick Harker

Wednesday

• Earnings Reports from Alibaba Group Holding Ltd. ($BABA (-7,41 %) ), Disney ($DIS (-2,81 %) ), Uber Technologies Inc. ($UBER (-2,12 %) ), CVS Health Corp. ($CVS (-3,82 %) ), Arm Holdings PLC ($ARM (-4,35 %) ) and PayPal Holdings Inc. ($PYPL (-2,33 %) )
• Speeches by Fed Gov. Adriana Kugler, Fed Gov. Michelle Bowman and Richmond Fed President Tom Barkin
• US trade deficit (December)
• Consumer credit (January)
• 
  Congressional Budget Office (CBO)

Thursday

• Earnings Reports from S&P Global Inc. ($SPGI (-0,49 %) ), Philip Morris International Inc. ($PM (-1,81 %) ), ConocoPhillips ($COP (-4,72 %) ), Unilever ($UL (+0 %) ), Honda ($HMC (-1,72 %) ) and AstraZeneca ($AZN (+0,42 %) )
• Initial claims for unemployment benefits (week ending February 3)
• Wholesale inventories (December)
• Speech by Richmond Fed President Tom Barkin
• Financial stability statement by Treasury Secretary Janet Yellen before Congress

Friday

• Earnings Report from PepsiCo ($PEP (-2,88 %) )
• Annual seasonal adjustments (CPI)

I just read an article that claims General Electric stock is better than Apple, Meta and Tesla. I am skeptical and would like to hear your opinion about General Electric.

General Electric is an American conglomerate that has posted a 73% gain on the stock market in one year. This means that the $GEC share outperforms the tech giants $AAPL (-4,39 %), $META (-1,91 %) and $TSLA (-5,17 %), but does that make the stock fundamentally better now?

General Electric's success can be attributed to extensive turnarounds and strategic restructuring. After a difficult period in which the company stumbled from crisis to crisis, new CEO Larry Culp implemented a turnaround plan five years ago. A central aspect of this plan is the splitting of the Group into three independent companies.

Back in January, the medical technology division was spun off as a separate subsidiary, GE Healthcare Technologies. $GEHC (-6 %) recently raised its forecast for 2023 and now expects organic sales growth of 6-8% due to higher demand.

Another spinoff is on the horizon with GE Vernova. Although the gas turbine and wind turbine manufacturer has faced competitive pressure in recent years, growth prospects in the renewable energy sector are promising.

General Electric's future focus will be on GE Aerospace, its aerospace division. There, the company focuses on the production and maintenance of aircraft engines. The increasing demand from major aircraft manufacturers such as. $BA (-0,61 %) and $AIR (-0,69 %) as well as long-term maintenance and service contracts for new aircraft engines are making a major contribution to the significant growth in sales.

General Electric is forecasting double-digit growth for the current fiscal year. I'm keeping an eye on the company and am curious to see what happens next.

How do you see the growth prospects for General Electric? I think the prospects are not bad, but whether you can compare them with the big companies like Apple and Meta, I dare to doubt. What do you guys think? Are any of you invested in General Electric?

Who can remember my post on $NNOX remember?

5 months have passed since then. Something significant has changed.

I have invested.The ARC system has received clearance from the FDA for the 510(k) application.

This means that the product and the included cloud software can be distributed to professional medical facilities in the USA.

The ARC is a multiple X-ray source system that enables 3D imaging with much smaller and simpler hardware.

X-rays are no longer generated with 2000 degree hot cathodes, but with a specially developed semiconductor.

Medical imaging around $100k instead of a million dollar investment. But from an investor's perspective, there is also an "as-a-service" model via cloud service.

Do you see the business of Siemens $SHL (-1,59 %) Philips $PHIA (-1,43 %) GE Health $GEHC (-6 %) business at risk?

Can you imagine this market being disrupted?

I have a small bet going on and am in with just under 1.5% of my portfolio.

After the publication of the FDA approval, I bought 50 units.

An investment company of the SK Group from Korea, which is a manufacturing partner of the semiconductors, has the largest share of over 7.5%. After that the #ceo has a share of over 5%.

Opinions?