GE Healthcare lowers its yearly profit projection due to effects from Trump's tariffs
GE HealthCare's Trade War Woes and Record-Breaking Q1 Results
In the midst of a global trade war escalated by U.S. President Donald Trump's tariff policies, GE HealthCare Technologies feels the heat. Yet, shares skyrocketed more than 6% in premarket trading this week, as the medical device giant delivered positive quarterly profits and revenue.
The company's quarterly adjusted profit of $1.01 per share surpassed analysts' average estimate of 91 cents per share, while its quarterly revenue of $4.78 billion beat the projected $4.66 billion, driven primarily by growth in the U.S. and its largest imaging segment. A share repurchase authorization of up to $1 billion also boosted investor confidence.
However, the trade conflict does take its toll. GE HealthCare expects a hefty $0.85 hit to its full-year adjusted per share profit, with the new forecast ranging from $3.90 to $4.10 per share, down from the previous estimate of between $4.61 and $4.75.
This financial storm is mainly caused by tariffs, with the brunt coming from the trade tensions between the U.S. and China. The company anticipates bilateral tariffs, duties in Mexico and Canada, and Trump's levies on the rest of the world returning to pre-pause levels in July.
BTIG analyst Ryan Zimmerman thinks GE HealthCare's forecast is a "worst case", accounting for all current tariffs and little for potential trade improvements or other factors. Initially, the trade war didn't make a significant impact on the first quarter.
China, a key source of raw materials for the pharmaceutical and medical device sectors, has been particularly under Trump's scrutiny. The administration has launched investigations into pharmaceutical and semiconductor imports, aiming to impose tariffs on both sectors.
Despite the challenges, GE HealthCare remains resilient. To counter the tariff impact, the company is refining its compliance with U.S.-Mexico-Canada Agreement regulations, exploring alternative logistics routes, and ramping up dual sourcing of supplies. Local manufacturing of certain products is also on the table to reduce import dependency.
In the long run, GE HealthCare anticipates a decrease in tariff costs in 2026 as its strategic measures bear fruit. Despite the trade war turbulence, the company expects organic revenue growth between 2% and 3% for the year.
[References:1. GE HealthCare Technologies Q1 2025 Earnings Release2. GE HealthCare 2025 Tariff Impact Analysis3. GE HealthCare Q2-Q4 2025 Tariff Projections4. GE HealthCare 2025 Adjusted Earnings Per Share Forecast5. GE HealthCare Q1 2025 Financial Results]
- Despite the trade war escalated by U.S. President Donald Trump's tariff policies negatively impacting GE HealthCare Technologies, its shares saw an increase of more than 6% in premarket trading this week.
- The company's positive quarterly profits and revenue were driven primarily by growth in the U.S. and its largest imaging segment, contributing to the premarket trading surge.
- GE HealthCare expects a $0.85 hit to its full-year adjusted per share profit due to the trade conflict, with the company anticipating bilateral tariffs, duties in Mexico and Canada, and Trump's levies on the rest of the world returning to pre-pause levels in July.
- China, a key source of raw materials for the pharmaceutical and medical device sectors, has been under scrutiny by the Trump administration, which has launched investigations into pharmaceutical and semiconductor imports, aiming to impose tariffs on both sectors.
- In the long run, GE HealthCare anticipates a decrease in tariff costs in 2026 as its strategic measures bear fruit, expecting organic revenue growth between 2% and 3% for the year.
- To counter the tariff impact, GE HealthCare is refining its compliance with U.S.-Mexico-Canada Agreement regulations, exploring alternative logistics routes, and ramping up dual sourcing of supplies, as well as considering local manufacturing of certain products to reduce import dependency.
