GE HealthCare Technologies Inc. (GEHC) Q2 2023 Earnings Call Transcript

For the period ending June 30, 2023

July 25, 2023 8:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Good day, ladies and gentlemen. Welcome to the GE HealthCare Second Quarter 2023 Earnings Conference Call. My name is Olivia and I’ll be your conference coordinator today. As a reminder, this conference is being recorded.

I would now like to turn the program over to your host for today’s conference, Carolynne Borders, Chief Investor Relations Officer. Please proceed.

Carolynne Borders

Thanks, Olivia. Welcome to GE HealthCare’s second quarter 2023 earnings call. I’m joined by our President and CEO, Peter Arduini; and our Vice President and CFO, Jay Saccaro. Our conference call remarks will include both GAAP and non-GAAP financial results. Reconciliations between GAAP and non-GAAP measures can be found in today’s press release and in the presentation slides available on our website.

During this call, we’ll make forward-looking statements about our performance. These statements are based on how we see things today. As described in our SEC filings, actual results may differ materially due to risks and uncertainties.

With that, I’ll hand the call over to Peter.

Peter Arduini

Thanks, Carolynne. First, let me welcome Jay who’s joining us for his first earnings call with GE HealthCare. Since he arrived last month, he’s hit the ground running to immerse himself in our business and has been meeting with our global teams. You’ll hear more from Jay shortly.

Now let’s look at our results for the second quarter. We delivered strong performance with 9% year-over-year organic revenue growth. This was driven by strong demand for NPIs and the continued value that we bring to our customers. We were also pleased to see global demand improve sequentially, delivering 6% orders growth in the second quarter, up from 3% in the first quarter.

We’re encouraged by health care providers’ continued investment globally in capacity to improve patient care and productivity. Volume remains strong for surgical procedures, which drives demand for imaging, services and surgical equipment. In the U.S., customers are investing in products to improve productivity and enhance overall competitiveness. In the rest of the world, we’re seeing solid demand in hospitals and in buying behaviors associated with increased procedures as well as the need for more productivity to address labor constraints.

We’ve made good progress on our operating priorities, including increased discipline utilizing lean as a management capability and rigor in areas such as variable cost productivity. This resulted in a 14.8% adjusted EBIT margin, which was an improvement of 70 basis points from Q1. Adjusted EBIT margins were down slightly year-over-year on a standalone basis as we continue to invest in the business, with R&D spending up 16% year-over-year in the second quarter.