Medical equipment maker GE HealthCare (GEHC.O) has revised its full-year profit forecast downwards, citing persistent inflation-driven cost pressures. The announcement sent its shares tumbling approximately 13% in morning trading on Wednesday. GE HealthCare manufactures a range of diagnostic and imaging equipment vital for healthcare providers globally, from MRI machines to ultrasound systems. The company also reported first-quarter profit figures that missed Wall Street estimates, partly due to a resolved supplier issue within its pharmaceutical diagnostics business.
CEO Peter Arduini highlighted “significant increases” in memory chip prices, alongside elevated oil and freight costs during the first quarter. These inflationary pressures are anticipated to endure through the remainder of 2026. The company expects a gross inflation impact of approximately US$250 million this year, translating to around 43 cents per share. CFO Jay Saccaro noted that the first quarter saw limited impact due to inventory accounting, with the second quarter marking the first substantial hit and the largest effects expected in subsequent quarters.
To counteract these headwinds, GE HealthCare plans to offset more than half of the inflationary pressure through strategic pricing adjustments and cost-saving initiatives, with most benefits materialising in the latter half of the year as new orders reflect price increases. Tariffs also impacted first-quarter profit by about 16 cents per share, though this is expected to be the largest quarterly impact, with pressures easing later in the year. Despite the cost challenges, customer demand for diagnostic and imaging equipment remains robust across regions, supported by solid procedure growth and strong order backlogs. For 2026, GE HealthCare now anticipates adjusted profit of US$4.80 to US$5.00 per share, down from its earlier forecast of US$4.95 to US$5.15, while first-quarter adjusted earnings came in at US$0.99 per share, missing analysts’ estimate of US$1.05.
