GE HealthCare's Q1 2025: Unraveling Contradictions in Tariff Impact, China Market Performance, and Recovery Expectations

Tariff impact and mitigation efforts, China market performance and expectations, order growth and revenue expectations, China market recovery expectations, and China market growth and stimulus impact are the key contradictions discussed in GE HealthCare's latest 2025Q1 earnings call.



Strong Organic Revenue Growth:
- GE Healthcare reported organic revenue growth of 4% for Q1 2025, with strong performance across all segments.
- The growth was driven by robust demand in the U.S. market, particularly in imaging products for cardiology and oncology, and a significant increase in backlog and book-to-bill ratio.

Tariff Impact and Mitigation Actions:
- The company estimated the gross tariff impact to be approximately $1.75 per share for 2025, with mitigations reducing this to $0.80 per share.
- GE Healthcare is actively working on mitigating tariff exposure through product and component moves, product configuration changes, and dual-sourcing strategies to manage tariff impacts and optimize supply chains.

Investment in Innovation and R&D:
- GE Healthcare reported an R&D investment of 7% of sales, which increased 6% year-over-year, emphasizing the commitment to innovation and product leadership.
- Key pipeline products like radiopharmaceuticals, total body PET, and photon counting CT are expected to drive growth in the coming years.

Segment Performance and Margin Acceleration:
- Imaging segment organic revenue was up 5% year-over-year, with a segment EBIT margin improvement of 130 basis points.
- This was achieved through productivity improvements, volume, and price increases, despite ongoing investment in R&D and new product launches.