GE HealthCare recently reported strong Q1 2025 earnings, but warned of a significant tariff impact expected later in the year. Despite tariff pressures, the company posted $4.8 billion in earnings for the first quarter, marking 4% organic growth. Growth was driven primarily by strong U.S. market demand for imaging systems in cardiology and oncology, with particular success in imaging systems ($2.14 billion in revenue) and advanced visualization ($1.24 billion).
However, tariffs on goods imported to the U.S. and other global trade barriers are set to cost GE around $500 million in 2025. Bilateral tariffs between the U.S. and China account for the largest portion, with $375 million expected to be the biggest factor. GE projects a more significant tariff impact starting in the second half of 2025, with $200 million in potential losses by Q3 and Q4.
Key Impact Details:
- Tariff Impact: GE forecasts a $1.75 per share reduction in earnings due to tariffs, potentially mitigated to $0.85 per share with ongoing efforts to rework supply chains.
- China Trade Tensions: The tariffs imposed between the U.S. and China have affected GE’s exports to China, a critical market. The company predicts negative growth in China for the first half of 2025, with only slight recovery in the latter half.
- Mitigation Measures: GE is accelerating efforts to move manufacturing closer to markets where products are sold and adjust supply chains to alleviate tariff pressures.
Despite these challenges, GE’s pharmaceutical diagnostics division saw an 8% revenue increase, and the company is optimistic about growth driven by innovative products like photon-counting CT and total body PET systems, slated for release in 2026.
GE HealthCare remains focused on mitigating the impacts of tariffs through strategic production moves and efficient logistics, with an eye on improving its position in global healthcare markets.
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