Shares of GE HealthCare Technologies Inc. (GEHC) jumped on Wednesday after the medical technology company reported second-quarter results that topped Wall Street estimates. The stock was up more than 11% in afternoon trading, as investors cheered strong demand for imaging equipment and pharmaceutical diagnostics.
The company reported adjusted earnings of $1.13 per share, beating the analyst consensus estimate of $1.03. Revenue came in at $5.30 billion, up 5.7% from a year ago and slightly above the $5.26 billion analysts were expecting.
But the headline number that really got people excited was the backlog. GE HealthCare ended the quarter with a record $23.9 billion in orders waiting to be fulfilled — that's up $2.6 billion from a year earlier. The company also posted a record book-to-bill ratio of 1.15, meaning orders are coming in faster than they're being shipped. That gives management a lot of visibility into future revenue.
“Our continued investment in precision innovation is expanding our addressable markets, strengthening our competitive position and supporting durable short- and long-term growth,” said CEO Peter Arduini.
Imaging and Diagnostics Lead the Way
Organic revenue grew 3.5%, with particular strength in Pharmaceutical Diagnostics and Advanced Imaging Solutions. Imaging revenue rose 7.9% to $3.77 billion, while Pharmaceutical Diagnostics revenue jumped 15.6% to $843 million. Total organic orders increased 11.1%, compared with just 3.4% growth a year earlier.
The company credited new product launches and AI-enabled innovations for strengthening its competitive position and customer relationships.
Not everything was rosy, though. Patient Care Solutions revenue fell 13.3% to $675 million. That business, which includes monitoring and anesthesia equipment, is now under strategic review. Arduini said the company is “reviewing strategic options” while working to restore growth and profitability.
Outlook and CFO Change
GE HealthCare reaffirmed its 2026 adjusted earnings guidance of $4.80 to $5.00 per share, compared with the analyst consensus of $4.87. The company also maintained its forecast for organic revenue growth of 3% to 4% and adjusted EBIT margin of 15.4% to 15.7%, representing year-over-year expansion of 10 to 40 basis points.
Management said it still expects about $250 million in inflation-related costs tied to memory chips, oil, freight and other components.
Earlier this week, the company announced that CFO Jay Saccaro will step down effective Aug. 14. George Newcomb, the company's controller and chief accounting officer, will serve as interim CFO while the search for a permanent successor is underway.
During the earnings call, management expressed confidence in the medium-term outlook, targeting revenue and margin expansion through 2028. The company expects to launch new anesthesia, monitoring and digital products later this year and in 2027.
At the time of publication, GE HealthCare shares were trading at $71.25, up 11.14%.
