GE HealthCare Reports Fourth Quarter and Full Year 2022 Financial Results

Original from: businesswire

GE HealthCare (Nasdaq: GEHC), a leading global precision care innovator, reported financial results for the fourth quarter and full year ended December 31, 2022.

GE HealthCare President and CEO Peter Arduini said, “GE HealthCare delivered strong revenue growth in the fourth quarter and full year 2022 driven by robust end market demand, improved pricing, and easing supply chain pressures. Revenue growth reflects our progress to offset delivery challenges and improve product fulfillment."

Arduini continued, "Looking ahead, we're confident that our accelerated investment in innovation, as well as standardization across platforms, will drive revenue and margin growth. We're seeing customers continue to invest along with macroeconomic tailwinds, such as increasing healthcare digitization, expanding access to care, and an aging population globally. We are well positioned to deliver on our 2023 commitments.”

Fourth quarter 2022 total financial performance

- Revenues of $4.9 billion increased 8% and 13% on an Organic basis* year-over-year, driven by growth in Imaging, Patient Care Solutions (PCS), and Ultrasound. Acquisitions favorably impacted total revenue growth by 1% and foreign exchange negatively impacted growth by 6%. Total company book-to-bill, defined as Total orders divided by Total revenues within a given financial period, was 1.07 times for the quarter, led by strong order growth in Imaging and Ultrasound.

- Net income was $554 million versus $564 million for the prior year, and Adjusted EBIT* was $844 million versus $827 million.

- Net income margin was 11.2% versus 12.3% for the prior year, and Adjusted EBIT margin* was 17.1% versus 18.0%. Both measures were impacted by inflation, mix, planned R&D investment, and foreign exchange headwinds, partially offset by price and volume gains. Standalone Adjusted EBIT margin* for the fourth quarter of 2022 is estimated at 16.1%, which includes the impact of standalone costs.

- Earnings per share (EPS) from continuing operations were $1.21, compared to $1.24 in the prior year. Adjusted EPS* were $1.31, compared to $1.36 in the prior year. Standalone Adjusted EPS* for the fourth quarter of 2022 were estimated at $1.06, which includes the impact of standalone costs, interest, and tax.

- Cash flow from operating activities was $1.1 billion, up $1.1 billion year-over-year, and Free cash flow* was $987 million, up $436 million year-over-year with improvement in supply chain and collections.

Fourth quarter 2022 segment financial performance

Imaging

- Revenues of $2.7 billion increased 11% and 18% on an Organic basis* year-over-year.

- Strong revenue growth was driven by Molecular Imaging and Computed Tomography, Magnetic Resonance, and surgery.

- Segment EBIT was $321 million versus $317 million for the prior year.

- Segment EBIT margin was 11.8% versus 13.0% for prior year, pressured by continued inflation, mix, and investment, partially offset by volume and price.

Ultrasound

- Revenues of $956 million increased 6% and 7% on an Organic basis* year-over-year.

- Solid revenue growth led by Radiology and Primary Care, Women’s Health, Cardiovascular, as well as handheld ultrasound.

- Segment EBIT was $285 million versus $278 million for the prior year.

- Segment EBIT margin was 29.8% versus 31.0% for prior year, impacted by inflation and investment, partially offset by price.

Patient Care Solutions

- Revenues of $786 million increased 7% and 10% on an Organic basis* year-over-year.

- Strong revenue improvement driven by impact of supply chain resiliency and price actions.

- Segment EBIT was $130 million versus $91 million for the prior year.

- Segment EBIT margin was 16.5% versus 12.4% for prior year, improved through price, volume, and lower costs, partially offset by inflation.

Pharmaceutical Diagnostics

- Revenues of $473 million decreased 5% and increased 2% on an Organic basis* year-over-year.

- Revenue was impacted by fewer procedures in China and normalization of U.S. customer inventory.

- Segment EBIT of $109 million versus $139 million for the prior year.

- Segment EBIT margin was 23.0% versus 27.8% for prior year, impacted by inflationary pressures on production materials and lower volumes.

Full year 2022 total financial performance

- Revenues of $18.3 billion increased 4% and 7% on an Organic basis* year-over-year, driven by Imaging and Ultrasound. Acquisitions favorably impacted total revenue growth by 1%, and foreign exchange negatively impacted growth by 4%. Total company book-to-bill was 1.08 times for the full year.

- Net income was $1.9 billion versus $2.2 billion for the prior year, and Adjusted EBIT* of $2.9 billion versus $3.2 billion.

- Net income margin was 10.4% versus 12.8% for the prior year, and Adjusted EBIT margin* was 15.6% versus 18.0%. Both measures were affected by inflationary pressures and planned R&D investments, partially offset by volume and price. Standalone Adjusted EBIT margin* for the full year 2022 is estimated at 14.5%, which includes the impact of standalone costs.

- EPS from continuing operations were $4.18 compared to $4.91 for full year 2021. Adjusted EPS* were $4.63, compared to $5.17 in prior year. Results continued to be impacted by inflation and planned R&D investments. Standalone Adjusted EPS* for full year 2022 were estimated at $3.38, which includes the impact of standalone costs, interest, and tax.

- Cash flow from operating activities was $2.1 billion versus $1.6 billion for the prior year, and Free cash flow* was $1.8 billion versus $2.8 billion, impacted by supply chain pressures and lower Adjusted EBIT*.

- Cash flow conversion, defined as cash from operating activities divided by net income attributable to GE HealthCare, was 111% while Free cash flow conversion* was 87% for 2022.

Growth and Innovation

- Announced agreement to acquire IMACTIS to strengthen capabilities in interventional guidance.

- AIR Recon DL technology recognized by Popular Science magazine in the ‘Best of What’s New’ awards.

- MediView collaboration to integrate medical imaging into mixed reality solutions through the development of the OmnifyXRTMinterventional suite system.

- Introduced SIGNA Experience: a new platform of transformative technologies that leverages the power of AI and deep-learning in MRI scanning.

- Announced $80 million investment to expand contrast media production capacity.

- GE HealthCare and Accuray collaborate to expand access, advance the practice of precision radiation therapy.

Outlook

Today, the Company reaffirmed its guidance for full year 2023 and introduced Adjusted EPS* guidance as follows:

- Organic revenue growth* in the range of 5% to 7% year-over-year.

- Adjusted EBIT margin* in the range of 15.0% to 15.5%, reflecting an expansion of 50 to 100 basis points versus 2022 Standalone Adjusted EBIT margin* of 14.5%.

- Adjusted effective tax rate (ETR)* in the range of 23% to 25%.

- Adjusted EPS* in the range of $3.60 to $3.75. This compares to 2022 Standalone Adjusted EPS* of $3.38.

- Free cash flow conversion* of 85% or more for the full year. The Company's cash flow outlook assumes that the legislation requiring R&D capitalization for tax purposes is repealed or deferred beyond 2023. The Free cash flow* impact of this legislation is approximately 10 points of Free cash flow conversion* for the year.

Source: GE HealthCare Reports Fourth Quarter and Full Year 2022 Financial Results