GE HealthCare Technologies (NASDAQ:GEHC) fell short of first-quarter revenue estimates on Tuesday, impacted by decreased sales in the Chinese market and weaker-than-anticipated demand for its scanning devices, resulting in a significant drop in its shares by as much as 12% before the market opening.
The medical device manufacturer’s revenue from the Chinese market, comprising nearly 13% of its total revenue, declined by over 11% in the quarter ending March 31.
BTIG analyst Ryan Zimmerman noted that many of GE HealthCare’s suppliers had reported weakness in China in the previous quarter, aligning with the current results.
During an investor conference last month, the company indicated an expected sales decline in China during the year’s first half. However, it anticipates growth in the second half, following the conclusion of the Chinese government’s anti-corruption campaign initiated last year. Additionally, the company faces pressure from the Chinese government’s volume-based procurement strategy, wherein the country procures drugs and medical devices in large quantities at discounted rates.
GE HealthCare’s total sales for the quarter stood at $4.65 billion, falling short of LSEG estimates of $4.8 billion. Sales in its imaging unit, the largest among its four segments, amounted to $2.47 billion, also below analysts’ projections of $2.61 billion. The company’s other units include ultrasound, patient care solutions, and pharmaceutical diagnostics.
On an adjusted basis, the company earned $0.90 per share in the first quarter, slightly below the estimated $0.91 per share.
Despite these challenges, GE HealthCare maintained its full-year adjusted profit-per-share forecast in the range of $4.20 to $4.35.
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