GE Healthcare Slashes 2025 Profit Forecast Amid Tariff Challenges

GE Healthcare has revised its 2025 earnings outlook, citing significant impacts from tariffs, particularly those affecting trade with China. The medical technology giant now expects adjusted earnings between $3.90 and $4.10 per share, down from the previous estimate of $4.61 to $4.75.

Tariff Impact and Mitigation Efforts

The company estimates an 85-cent-per-share impact from tariffs, with bilateral U.S. and China tariffs accounting for 75% of the total net effect. CEO Peter Arduini revealed that without mitigation actions, the gross impact would have been approximately $1.75 per share.

GE Healthcare is actively working to mitigate its tariff exposure through various strategies:

• Focusing on USMCA compliance
• Optimizing logistics routes
• Exploring dual sourcing options
• Considering localized production to align with consumption

CFO Jay Saccaro emphasized the company's commitment to further reducing the tariff impact through these tactical approaches.

Q1 Performance and Market Trends

Despite the tariff challenges, GE Healthcare reported strong first-quarter results:

• Q1 sales reached $4.78 billion, a 2.7% increase year-over-year
• Net income rose nearly 51% to $564 million

The U.S. market showed particular strength, driving double-digit growth in orders. Customers are prioritizing investments in imaging products, with a focus on cardiology and oncology. Arduini noted that the company gained market share across multiple segments.

Industry Outlook and Customer Demand

Despite global trade uncertainties, GE Healthcare remains optimistic about overall hospital capital demand. Saccaro highlighted a record backlog that has increased substantially year-over-year, indicating sustained customer interest.

"A lot of [customer budgets] were set earlier in the year," Saccaro explained, "and we haven't observed any significant cancellations or deferrals in response to the global trade environment."

Analyst Rick Wise from Stifel characterized GE Healthcare's Q1 performance as "truly positive," noting better-than-expected results in the company's China business despite the challenging tariff situation.