GE HealthCare Reviews Options for Patient Care Unit as Q2 Orders Hit Record

GE HealthCare said it is reviewing strategic options for its Patient Care Solutions business after the unit's sales fell 13.3% in the second quarter, even as the company reported record orders, according to its July 29 earnings release.

"In Patient Care Solutions, while we are focused on returning the business to growth and profitability, we are reviewing strategic options to maximize its long-term value," President and CEO Peter Arduini said. The company did not say what options it is considering.

Segment swings to a loss

Patient Care Solutions revenue fell to $675 million in the quarter, down 13.3% on a reported basis and 13.5% organically, according to the segment table in the release as filed with the Securities and Exchange Commission. The segment posted an EBIT loss of $26 million, a margin of negative 3.8%, down 1,150 basis points from a year earlier.

GE HealthCare said Patient Care Solutions' financial performance "continued to be challenged," and that the segment's decline, along with inflation in memory chips, oil and freight, weighed on company margins.

The company's other two segments grew. Advanced Imaging Solutions, a new segment formed in the quarter by combining the former Imaging and Advanced Visualization Solutions businesses, had revenue of $3.77 billion, up 7.9%. Pharmaceutical Diagnostics grew 15.6% to $843 million with a segment EBIT margin of 29.6%.

Company results and guidance

Total revenue rose 5.7% to $5.3 billion, with organic growth of 3.5%. Organic orders rose 11.1%, compared with 3.4% growth a year earlier, for a book-to-bill ratio of 1.15 and a backlog of $23.9 billion. Arduini said orders grew in every segment.

Net income attributable to GE HealthCare was $561 million, compared with $486 million a year earlier, and diluted earnings per share rose 16.5% to $1.24. Adjusted EPS, a non-GAAP measure, rose 6.6% to $1.13. Both figures benefited from refunds of tariffs collected under the International Emergency Economic Powers Act and from a lower tax rate, the company said. Adjusted EBIT margin was 14.2%, down 40 basis points.

Free cash flow was $68 million. GE HealthCare repurchased 3.3 million shares for $200 million in the quarter.

The company reaffirmed its full-year 2026 guidance of 3.0% to 4.0% organic revenue growth, adjusted EBIT margin of 15.4% to 15.7%, adjusted EPS of $4.80 to $5.00 and free cash flow of about $1.6 billion. It said it continues to expect about $250 million of inflation tied to memory chips, oil, freight and other components this year.

Among recent product news, the company listed FDA 510(k) clearance for MIM Contour ProtégéAI+ 2.0 radiation therapy planning software and a 510(k) submission for MIM KineticID, a 4D dynamic PET imaging product.