GE Healthcare Shares Rise After Providing 2023 Guidance

By Will Feuer

Shares of GE Healthcare Technologies Inc. rose Wednesday after the medical-technology company issued some preliminary results for the fourth quarter and provided guidance for 2023.

The stock climbed more than 9% to $65.47 a share, making it the top gainer in the S&P 500. It's on path to set a record close, beating the high of $60.49 set on Jan. 4, its first day of trading, according to Dow Jones Market Data.

The company, which completed its spinoff from General Electric Co. last week, said Tuesday that it expects adjusted earnings before interest and taxes margin to be 15% to 15.5% in 2023. Later, during a presentation at the J.P. Morgan Healthcare Conference, company executives said GE Healthcare Technologies is targeting adjusted EBIT margin in the high-teens to 20% range on a medium-term basis.

"We see a very clear path for our margin expansion," Chief Financial Officer Helmut Zodl said. The company is changing how it thinks about pricing and its front-end sales team, he said, as well as cutting costs in some areas.

"We don't need to have a subsidiary in every country," Mr. Zodl said. The company is also seeing signs of inflation easing, he said.

Chief Executive Peter Arduini said the company's backlog is at all-time levels due to a combination of supply challenges and pent-up demand for procedures.

"One of the things that is just evident is the amount of procedures that are actually waiting to happen around the world as I talk to customers in all continents is actually unprecedented," Mr. Arduini said.

Wait times for imaging procedures have extended to months at big institutions and hospital systems are prioritizing buying GE Healthcare's equipment to improve productivity, he said.

The company also said Tuesday that fourth-quarter revenue was about $4.9 billion, growth of about 12% on an organic basis, which strips out currency fluctuations as well as recent acquisitions and divestitures.

The company expects 2023 organic revenue to grow by 5% to 7% from 2022 levels. In 2022, organic revenue grew by about 7%. The company expects free-cash flow conversion of more than 85% in 2023.

Write to Will Feuer at [e-mail]

(END) Dow Jones Newswires

January 11, 2023 14:16 ET (19:16 GMT)

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