GE reports that revenues at its GE Healthcare business fell 21% for the second quarter, primarily due to the impact of the COVID-19 pandemic on the division's operations as well as the absence of revenue from its BioPharma business, which was divested in the first quarter.
For the period (end-June 30), GE Healthcare posted revenues of $3.9 billion, compared with revenues of $4.934 billion in the second quarter of 2019. Much of the decline was due to the absence of revenues from the BioPharma business, which GE sold to Danaher in March 2020. On an organic basis and with impact of BioPharma excluded, GE Healthcare's year-over-year revenues fell 4% in the most recent quarter.
The division's segment profit fell by 43% for the quarter, to $500 million, compared with a quarterly profit of $958 million in the corresponding quarter of 2019. Excluding the impact of BioPharma, profit margins remained flat.
In describing results from what it said was a "challenging quarter," the company noted that the sharp decline in the volume of advanced imaging exams due to the COVID-19 outbreak affected the company's performance in the period.
The company has been closely tracking the volume of CT and MRI scans being performed in the U.S., noting that volume for both modalities hit a nadir at the end of the first quarter. MRI volume fell to 40% of normal at that time, while CT volume was just below 60% of normal. On the positive side, GE reports that exam volume for both modalities has rebounded, and by the beginning of July, it was close to 100% of the volume reported in the fourth quarter.
At the same time, demand for products related to the COVID-19 pandemic remains high, according to GE. These include ventilators, patient monitors, anesthesiology systems, and x-ray and point-of-care ultrasound units.
On a regional basis, sales in Europe are up on a double-digit basis due to the region's "strong COVID-19 response," while the U.S. is mixed, China is recovering, and there is weakness in India, Japan, and Latin America.
As a leading indicator, orders in GE Healthcare for the period were $4.2 billion, down 18%.
