GE HealthCare Technologies Inc.
GEHC · Nasdaq
Next quarter
Reports Nov 4, 2026.
Consensus is $1.21 EPS for Sep 2026 across 6 estimates, ranging $1.19 to $1.25.
GEHC Jun 2026
- 8.65%
- -2.73%
- $1.04
- $1.13
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- —
Highlights
- Earnings beat: Adjusted EPS was $1.13 versus consensus of $1.04, an 8.65% surprise; GAAP diluted EPS was $1.24 versus $1.06 a year ago.
- Revenue growth: Revenue rose 5.7% year over year to $5.295 billion, including 3.5% organic growth, and increased from $5.131 billion in Q1 2026.
- AIS strength: Advanced Imaging Solutions revenue increased 7.9% year over year to $3.771 billion, with organic growth of 5.0%; Segment EBIT rose 15.4% to $525 million.
- PDx momentum: Pharmaceutical Diagnostics revenue grew 15.6% to $843 million, including 14.6% organic growth, while Segment EBIT increased 16.9% to $250 million.
- PCS deterioration: Patient Care Solutions revenue fell 13.3% to $675 million, driven by operational and fulfillment challenges; Segment EBIT declined to a $26 million loss from $60 million of profit.
- Tariff refunds: The company recognized $129 million of pre-tax tariff-refund benefits in the quarter, including $106 million related to 2025 tariffs and $23 million related to 2026 tariffs.
- Profitability: Operating income increased 13.1% year over year to $739 million, with margin expanding 90 basis points to 14.0%; adjusted EBIT rose 2.9% to $750 million, while adjusted margin fell 40 basis points to 14.2%.
- Intelerad acquisition: GE HealthCare completed the $2.293 billion cash acquisition of Intelerad, adding medical-imaging software and digital workflow capabilities to AIS and contributing $62 million of reported quarterly revenue.
- Cash and capital: Six-month operating cash flow was $458 million and free cash flow was $180 million, while cash declined to $2.105 billion after the Intelerad purchase and total debt increased to $10.093 billion.
Analysis
GE HealthCare delivered a solid second quarter on the headline numbers, with adjusted EPS of $1.13 beating the $1.04 consensus by 8.65%. Revenue of $5.295 billion increased 5.7% from the year-ago quarter and 3.2% sequentially from $5.131 billion in Q1 2026. GAAP operating income rose to $739 million from $654 million a year ago and $515 million in Q1, while net income attributable to GE HealthCare reached $561 million versus $486 million a year ago and $389 million in the prior quarter.
The print was defined by continued strength in AIS and PDx, offset by a sharp PCS setback. AIS generated 5.0% organic growth and higher EBIT, helped by CardioVascular & Interventional Solutions, CT and Molecular Imaging. PDx delivered 14.6% organic growth on volume and pricing in contrast media and radiopharmaceuticals. PCS revenue declined 13.5% organically and moved to a $26 million EBIT loss because of operational and fulfillment problems. The quarter also benefited from $129 million of tariff refunds, while adjusted EBIT grew only 2.9% and its margin contracted 40 basis points as inflation and acquisition-related investment continued. The $2.293 billion Intelerad acquisition expands the imaging software platform but materially reduced cash and increased leverage.
Headline results
Revenue growth and operating leverage produced a meaningful GAAP profit improvement, although the underlying adjusted result was more modest after excluding specified items.
- Revenue: Total revenue was $5.295 billion, up 5.7% year over year and 3.2% from Q1 2026; organic revenue grew 3.5%.
- Operating income: Operating income was $739 million, up from $654 million a year ago and $515 million in Q1, lifting operating margin to 14.0% from 13.1% a year ago.
- Adjusted earnings: Adjusted EBIT was $750 million, up 2.9% year over year, while adjusted EBIT margin declined to 14.2% from 14.6%. Adjusted net income rose 5.6% to $515 million.
- Per share: Adjusted EPS increased to $1.13 from $1.06 a year ago and exceeded the $1.04 consensus estimate. GAAP diluted EPS was $1.24.
AIS and PDx momentum
The company’s two largest growth engines accelerated and more than offset the weakness in PCS. GE HealthCare also moved to a three-segment structure by combining Imaging and Advanced Visualization Solutions into AIS, with historical results recast.
- AIS: Revenue increased 7.9% to $3.771 billion, including 5.0% organic growth. Management cited strong growth in CardioVascular & Interventional Solutions, CT and Molecular Imaging. Segment EBIT rose $70 million to $525 million, and margin improved to 13.9% from 13.0%.
- PDx: Revenue increased 15.6% to $843 million, with 14.6% organic growth driven by volume and price in contrast media and radiopharmaceuticals. Segment EBIT rose 16.9% to $250 million, with margin reaching 29.6%.
- Regional mix: USCAN revenue rose 5.8% to $2.476 billion, EMEA increased 6.3% to $1.348 billion, China grew 3.4% to $582 million, and Rest of World increased 6.3% to $888 million.
PCS operational setback
Patient Care Solutions was the clear weak spot in the quarter. The decline was not characterized as a demand issue alone; the filing specifically attributes the result primarily to operational and fulfillment challenges, alongside cost inflation.
- Revenue decline: PCS revenue fell 13.3% to $675 million, with organic revenue down 13.5%. Monitoring Solutions revenue declined to $503 million from $578 million, while Life Support Solutions fell to $172 million from $200 million.
- Profit impact: Segment EBIT deteriorated to a $26 million loss from $60 million of profit a year ago. For the six months, PCS EBIT was a $16 million loss versus $108 million of profit in 2025.
- Offsetting actions: PCS segment expenses fell to $700 million from $719 million, but the cost reduction was insufficient to absorb the revenue decline and inflationary pressure.
Tariffs and acquisition
The quarter included a substantial tariff refund benefit and the first meaningful contribution from Intelerad, making reported profitability and revenue less representative of the established businesses alone.
- Tariff refunds: GE HealthCare received $107 million of refunds and recorded a further $38 million receivable for claims not yet reimbursed. It recognized $106 million of pre-tax benefit for tariffs incurred in 2025 and $23 million for 2026 tariffs.
- Intelerad: The company acquired the medical-imaging software provider on March 18 for approximately $2.293 billion in cash. Intelerad is included in AIS and contributed $62 million of reported second-quarter revenue; the purchase added $1.629 billion of goodwill and $845 million of definite-lived intangible assets.
- Integration costs: Acquisition and disposition-related charges were $11 million in the quarter, while amortization of acquisition-related intangibles increased to $61 million from $40 million a year earlier.
Cash and capital
Cash generation improved operationally, but the Intelerad purchase drove a large investing outflow and left the company with less cash and somewhat higher debt.
- Cash flow: Six-month operating cash flow rose to $458 million from $344 million, and free cash flow increased 70.0% to $180 million after $278 million of capital and internal-use software spending.
- Liquidity: Cash, cash equivalents and restricted cash declined to $2.105 billion at June 30 from $4.512 billion at December 31, 2025, primarily because of the Intelerad acquisition.
- Debt: Total borrowings increased to $10.093 billion from $10.003 billion at year-end, including $650 million outstanding under the delayed-draw term loan facility.
- Shareholder returns: GE HealthCare repurchased $200 million of stock in the quarter and $300 million in the first half, leaving $500 million available under its authorization.
