GE HealthCare Reports Fourth Quarter and Full Year 2023 Financial Results
Delivers Strong Financial and Operating Performance in First Year as Public Company
Fourth Quarter 2023
-- Revenue growth was 5% year-over-year; Organic revenue growth* of 5%
-- Net income margin was 7.7% versus 11.2% for the prior year; Adjusted
Earnings Before Interest and Taxes (EBIT) margin* was 16.1% versus the
fourth quarter of 2022 Standalone Adjusted EBIT margin* of 16.1%
-- Cash flow from operating activities was $1.1 billion versus $1.1
billion for the prior year; Free cash flow* was $956 million versus $987
million; repaid $850 million of debt in the fourth quarter of 2023 and an
additional $150 million of debt in January 2024
Full Year 2023
-- Revenue growth was 7% year-over-year; Organic revenue growth* of 8%
-- Net income margin was 8% versus 10.4% for the prior year; Adjusted EBIT
margin* was 15.1% versus 2022 Standalone Adjusted EBIT margin* of 14.5%
-- Cash flow from operating activities was $2.1 billion versus $2.1
billion for the prior year, and Free cash flow* was $1.7 billion versus
$1.8 billion last year, due to standalone interest and postretirement
benefit payments
-- Company provides 2024 financial guidance, demonstrating progress toward
medium-term financial targets
CHICAGO--(BUSINESS WIRE)--February 06, 2024--
GE HealthCare (Nasdaq: GEHC), a leading global precision care innovator, today reported financial results for the fourth quarter ended December 31, 2023.
GE HealthCare President and CEO Peter Arduini said, “After our first year as a publicly traded company, I’m pleased to announce robust fourth quarter and full year results. This strong financial performance is a testament to our dedicated team and successful execution of our precision care strategy. We’ve made significant strides, including investing over $1 billion in R&D for future growth, helping drive more than 40 innovations in 2023. We bolstered our market position with strategic acquisitions, while at the same time paying down $1 billion in debt, setting a solid foundation for continued growth. We’re confident heading into 2024 amid the backdrop of an improved capital equipment landscape.”
Fourth Quarter 2023 Total Company Financial Performance
-- Revenues of $5.2 billion increased 5% on both a reported and Organic*
basis year-over-year, driven by price and volume.
-- Total company book-to-bill was strong at 1.05 times, defined as Total
orders divided by Total revenues, as the Company continues to build a
robust backlog. Total company orders increased 3% organically
year-over-year.
-- Net income attributable to GE HealthCare was $403 million versus $554
million for the prior year, and Adjusted EBIT* was $837 million versus
$844 million.
-- Net income margin was 7.7% versus 11.2% for the prior year, down 350
basis points (bps) primarily impacted by standalone interest expense.
Adjusted EBIT margin* was 16.1% versus 17.1%, down 100 bps. Adjusted EBIT
margin* for the fourth quarter of 2023 was flat versus the Company's
estimated fourth quarter 2022 Standalone Adjusted EBIT margin* of 16.1%
as benefits from productivity and price were offset primarily by
investments.
-- Earnings per share (EPS) from continuing operations were $0.88 versus
$1.21, down $0.33 from the prior year. Adjusted EPS* was $1.18 versus
$1.31, down $0.13 from the prior year. Both comparisons were impacted by
standalone interest expense. Adjusted EPS* for the fourth quarter of 2023
grew $0.12 versus the Company's estimated fourth quarter 2022 Standalone
Adjusted EPS* of $1.06.
-- Cash flow from operating activities was $1.1 billion, down $13 million
year-over-year. Free cash flow* was $956 million, down $31 million
year-over-year. Both metrics were primarily impacted by standalone
interest and postretirement benefit payments. The Company repaid $850
million of debt in the fourth quarter of 2023 and an additional $150
million of debt in January 2024.
Fourth Quarter 2023 Segment Financial Performance
Imaging
-- Revenues of $2.8 billion increased 4% on both a reported and Organic*
basis year-over-year.
-- Segment EBIT was $337 million versus $321 million for the prior year.
-- Segment EBIT margin was 11.9% versus 11.8% for the prior year.
Ultrasound
-- Revenues of $944 million declined 1% reported and 2% on an Organic*
basis year-over-year.
-- Segment EBIT was $244 million versus $285 million for the prior year.
-- Segment EBIT margin was 25.8% versus 29.8% for prior year.
Patient Care Solutions
-- Revenues of $827 million increased 5% reported and 4% on an Organic*
basis year-over-year.
-- Segment EBIT was $110 million versus $130 million for the prior year.
-- Segment EBIT margin was 13.3% versus 16.5% for the prior year.
Pharmaceutical Diagnostics
-- Revenues of $591 million increased 25% reported and 23% on an Organic*
basis year-over-year.
-- Segment EBIT was $144 million versus $109 million for the prior year.
-- Segment EBIT margin was 24.4% versus 23.0% for the prior year.
Full Year 2023 Total Company Financial Performance
-- Revenues of $19.6 billion increased 7% year-over-year and 8% on an
Organic* basis with growth across all segments and regions.
-- Total company book-to-bill was 1.03 times, as orders dollars outpaced
revenues. Total company orders increased 3% organically year-over-year.
-- Net income attributable to GE HealthCare was $1.6 billion versus $1.9
billion for the prior year, and Adjusted EBIT* was $3.0 billion versus
$2.9 billion in the same period last year.
-- Net income margin was 8% versus 10.4% for the prior year, down 240 bps,
primarily impacted by standalone interest expense. Adjusted EBIT margin*
was 15.1% versus 15.6% last year, down 50 bps. Adjusted EBIT margin* for
the full year 2023 was up 60 bps versus the Company's estimated full year
2022 Standalone Adjusted EBIT margin* of 14.5% last year. Margin
benefited from productivity, price, and volume, and was partially offset
by inflation.
-- EPS from continuing operations was $3.04 compared to $4.18 for full
year 2022, down $1.14 from the prior year. Adjusted EPS* was $3.93,
versus $4.63 in prior year. Both comparisons were impacted by standalone
interest expense. Adjusted EPS* for the full year 2023 grew $0.55 versus
the Company's estimated full year 2022 Standalone Adjusted EPS* of
$3.38.
-- Cash flow from operating activities was $2.1 billion, down $33 million
year-over-year, and Free cash flow* was $1.7 billion, down $113 million
year-over-year, due to standalone interest and postretirement benefit
payments.
-- Cash flow conversion, defined as cash from operating activities divided
by net income attributable to GE HealthCare, was 134% while Free cash
flow conversion* was 95% for 2023.
Growth and Innovation
-- GE HealthCare Announces Agreement to Acquire MIM Software
-- GE HealthCare Unveils SIGNA Champion, a 1.5T Wide Bore MRI System
Powered by Artificial Intelligence (AI) for High Performance and Patient
Comfort
-- GE HealthCare Participates in Project to Pioneer AI-Screening Platform
for Early Detection of Alzheimer's Disease
-- GE HealthCare Announces New Version of Digital Expert Access, the First
FDA 510(k)-Cleared Device to Enable Remote Patient Scanning, and
Exclusive Distribution Agreement with IONIC Health
-- University of Wisconsin--Madison and GE HealthCare Broaden Shared
Commitment to Healthcare Innovation
-- Expanding the Reach of Care for Cancer and Other Disease States: BAMF
Health and GE HealthCare collaborate to enable sustainable and scalable
solutions for growth in Theranostics
-- GE HealthCare Announces New Data Validating AI Models for Predicting
Patient Response to Immunotherapies
-- GE HealthCare Tops List with Highest Number of AI-Enabled Medical
Device Authorizations, Developing Innovative Solutions for Precision
Care
2024 Guidance
Full year 2024 guidance is as follows:
-- Organic revenue growth* of approximately 4% year-over-year.
-- Adjusted EBIT margin* in the range of 15.6% to 15.9%, reflecting an
expansion of 50 to 80 basis points versus 2023 Adjusted EBIT margin* of
15.1%.
-- Adjusted effective tax rate (ETR)* in the range of 23% to 25%.
-- Adjusted EPS* in the range of $4.20 to $4.35, representing 7% to 11%
growth versus Adjusted EPS* of $3.93 for 2023.
-- Free cash flow* of approximately $1.8 billion.
The Company provides its outlook on a non-GAAP basis. Refer to the Non-GAAP Financial Measures in Outlook section below for more details.
Consolidated and Combined
Statements of Income
For the years ended December 31
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(In millions, except per
share amounts) 2023 2022 2021
----------------------------- -------- ------- -------
Sales of products $ 13,127 $ 12,044 $ 11,165
Sales of services 6,425 6,297 6,420
----------------------------- -------- ------- -------
Total revenues 19,552 18,341 17,585
----------------------------- -------- ------- -------
Cost of products 8,465 7,975 7,196
Cost of services 3,165 3,187 3,215