GE Healthcare reported that sales edged up 1% in the company's second-quarter financial results. The division's segment profit declined, however, due to supply-chain disruptions and the impact of COVID-19 lockdowns in China.
For the quarter (end-June 30), GE Healthcare posted revenues of $4.519 billion, up 1% compared with $4.454 billion in the second quarter of 2021. The division's segment profit was $651 million, down compared with segment profit of $801 million in the corresponding quarter of 2021. The division's profit margin declined to 14.4% from 18% in the year-ago quarter.
The division's orders grew 1% after currency conversion compared with what GE called a "tough comparison" in 2021, when orders grew 11% organically over the second quarter of 2020. Orders for services grew 5% year over year, which was offset by a decline in orders for equipment.
Growth was driven by the company's Imaging, Ultrasound, and Healthcare Systems Services segments, but it was held back by "continued supply chain challenges, as well as the impact of COVID-19 in China." The division's decline in profitability was caused by "material and logistics inflation," GE reported.
Among other milestones for GE Healthcare, the company cited its plan announced earlier this month to spinoff the division as one of three standalone companies, to be called GE HealthCare. GE is planning to file a Form 10 with the U.S. Securities and Exchange Commission, has completed consultation with the European Works Council, and has announced that the spinoff will be listed on the Nasdaq Global Select Market under the ticker symbol "GEHC."
GE said it expects revenue growth in the mid-single digits for the rest of the year in the healthcare business, versus its previous guidance of growth in the low- to mid-single digits. The healthcare division's full-year profit is expected to be about $3 billion, down slightly from the company's previous guidance.
