The medical device maker posted $561 million in net income, boosted by $129 million in tariff refunds and strong imaging and diagnostics sales
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GE HealthCare reported second-quarter net income of $561 million on Wednesday, up from $486 million a year earlier, as strong demand for imaging devices and pharmaceutical diagnostics combined with refunds on tariffs imposed under President Donald Trump to lift results above Wall Street expectations.
GE HealthCare stock climbed 12% before the opening bell.
Revenue for the three months ended June 30 came in at $5.3 billion, up 5.7% from the prior-year period. Organic revenue grew 3.5%, driven by the company's Advanced Imaging Solutions and Pharmaceutical Diagnostics segments, which posted year-over-year revenue growth of 7.9% and 15.6%, respectively. Patient Care Solutions revenue fell 13.3%.
Adjusted earnings per share came in at $1.13, up from $1.06 a year earlier. The average analyst estimate had been $1.04, per LSEG data cited by Reuters.
The quarterly results included $129 million in net income benefit from refunds on tariffs incurred under the International Emergency Economic Powers Act. The refunds stem from court rulings that the tariffs were unlawfully collected and are owed back to companies that paid them, according to Reuters. The company also flagged that broader geopolitical tensions, particularly in the Middle East, weighed on its cost structure, supply chains, and logistics operations over the period.
Adjusted EBIT margin was 14.2%, contracting 40 basis points year over year; the company attributed the compression to cost pressures in memory chips, oil, and freight, along with weakness in the Patient Care Solutions segment. The company said it is reviewing strategic options for Patient Care Solutions to maximize its long-term value.
Total orders grew 11.1% organically, compared with 3.4% growth in the year-ago period. The book-to-bill ratio was 1.15 times and backlog reached $23.9 billion, both records the company said.
GE HealthCare President and CEO Peter Arduini said in a statement: "We delivered record orders and backlog in the second quarter, with orders growth across every segment, demonstrating strong commercial execution, including the adoption of new products."
The company reaffirmed its full-year 2026 guidance, including organic revenue growth of 3.0% to 4.0%, adjusted EPS of $4.80 to $5.00, and free cash flow of approximately $1.6 billion. The company noted that tariff refunds on amounts incurred in 2025 — totaling $106 million to date — are excluded from its adjusted guidance figures.
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