GE HealthCare Raises 2026 Outlook as Q3 Revenue and Margins Grow

GE HealthCare Technologies Inc. (Nasdaq: GEHC) raised its full-year 2026 guidance after third-quarter revenue and profitability increased across all three of its business segments, supported by stronger product fulfillment, new-product adoption, pricing and cost actions.

Revenue for the quarter ended September 30 rose 7.2% year over year to $5.51 billion. Organic revenue, which excludes acquisitions, dispositions and foreign-exchange effects, increased 6.2%. Organic orders grew 4.0%, while the company reported a book-to-bill ratio of 1.03 and a $23.7 billion backlog, indicating continued customer demand.

Net income attributable to GE HealthCare increased 37.9% to $615 million, and diluted earnings per share rose to $1.36 from $0.98. Adjusted EBIT advanced 19.9% to $913 million, lifting adjusted EBIT margin by 180 basis points to 16.6%. Adjusted EPS increased 25.1% to $1.34.

Management attributed the margin improvement to volume growth and price and cost actions, which offset inflation and tariff effects. Inflationary pressures included higher costs for memory components, oil and freight. The company said it is strengthening memory-chip supply resilience through multi-year agreements.

Growth Across All Segments

Advanced Imaging Solutions, GE HealthCare’s largest segment, generated revenue of $3.87 billion, up 4.5% organically. Growth was led by computed tomography, Cardiovascular and Interventional Solutions, and Surgical Innovations. Segment EBIT increased 15.8% to $593 million, while margin expanded 130 basis points to 15.3%. Higher volume, pricing and tariff favorability supported profitability, partly offset by inflation.

Pharmaceutical Diagnostics delivered the fastest organic growth, with revenue increasing 13.8% to $846 million. Demand was broad-based in cardiology and oncology, with growth in contrast media and radiopharmaceutical products including Vizamyl, Cerianna and Flyrcado. Segment EBIT rose 14.9% to $253 million, and margin increased 50 basis points to 29.9%, as volume and pricing more than offset planned investment in product launches and the development pipeline.

The company also highlighted its planned acquisition of SOFIE Biosciences, which would add U.S. last-mile positron emission tomography supply and manufacturing capabilities, as well as U.S. rights to Phase 3 radiopharmaceutical candidate FAPI-74. The transaction is expected to close in the first half of 2027, subject to regulatory approvals and other closing conditions.

Patient Care Solutions continued its operational recovery. Revenue rose 8.8% organically to $793 million, driven by improved product fulfillment in Monitoring and Maternal Infant Care. Segment EBIT increased 148.8% to $68 million, and margin expanded 480 basis points to 8.6%, reflecting higher volume and cost productivity. GE HealthCare said second-half stabilization remained on track, supported by customer demand and operational execution, while a strategic review of the business is ongoing.

Cash Flow and Updated Outlook

Third-quarter cash from operating activities increased 52.9% to $907 million. Free cash flow rose 64.2% to $793 million from $483 million, supported by lower net tariff impact, operating profitability and the timing of collections. GE HealthCare also said it increased its cash dividend by 14%.

For 2026, the company now expects organic revenue growth of approximately 4%, compared with its previous range of 3% to 4%. It forecasts an adjusted EBIT margin of 15.5% to 15.7%, representing an improvement of 20 to 40 basis points from 2025; the prior range was 15.4% to 15.7%.

Adjusted EPS is now expected to be $4.95 to $5.05, up from the previous outlook of $4.80 to $5.00 and representing growth of 7.9% to 10.1%. GE HealthCare expects free cash flow of at least $1.6 billion, compared with its earlier forecast of approximately $1.6 billion. The company reaffirmed its adjusted effective tax-rate outlook of 20% to 21%.

Management said its Heartbeat operating model is supporting commercial execution, product-launch discipline, pricing and productivity. The company also cited regulatory milestones for the Photonova Spectra photon-counting CT system and StarGuide GX next-generation SPECT/CT, along with expanded ultrasound platforms and artificial-intelligence features, as elements of its medium-term growth strategy.

The outlook remains subject to risks including changes in tariffs and trade policy, geopolitical and economic instability, inflation, supply-chain constraints, foreign-exchange movements, developments in China, competitive pressures and the company’s ability to execute product launches and strategic transactions. GE HealthCare also noted that the timing and financial effects of restructuring, acquisitions, currency changes and investment revaluations could materially affect its GAAP results.