GE HealthCare shares fell 11.2% following first quarter results, as investors reacted to a profit outlook cut driven by mounting input cost inflation—particularly in memory chips, oil, and freight. The company reduced its full-year adjusted EPS guidance despite reporting solid revenue growth, with market disappointment centered on worsening margin pressures and the reduced profit forecast for 2026.
- Full-year adjusted EPS guidance was lowered by $0.15 due to an unresolved ~$250 million inflation impact, primarily from memory chips, oil, freight, and metals costs.
- Management expects to offset a portion of these costs, but more than $100 million remains as a headwind even after mitigation actions.
- First quarter top-line growth was at the high end of expectations, driven by pharmaceutical diagnostics, advanced visualization, and imaging businesses.
- A supplier recall in the pharmaceutical diagnostics segment negatively impacted profits, though management notes the issue was resolved within the quarter.
- Early innovation milestones in CT and MR platforms and continued momentum in new product launches and cloud-based acquisitions were highlighted, though key revenue contributions from major new imaging products are not expected until the first half of 2027.
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