By Sahil Pandey
April 29 (Reuters) – Medical equipment maker GE HealthCare on Wednesday cut its full-year profit forecast on the back of inflation-driven cost pressures, sending its shares down about 13% in morning trading.
The company also missed Wall Street estimates for first-quarter profit due to a supplier issue in its pharmaceutical Diagnostics business, which it said has since been resolved.
GE HealthCare saw “significant increases” in memory chip prices as well as oil and freight costs during the first quarter and expects the pressures to persist through the rest of 2026, CEO Peter Arduini said.
The company expects about $250 million in gross inflation impact this year, equivalent to 43 cents per share.
The inflation impact was limited in the first quarter due to inventory accounting, with the second quarter marking the first meaningful hit and the largest effects expected in the remaining quarters, CFO Jay Saccaro said.
The company plans to offset more than half of the inflation pressure through pricing and cost actions, Saccaro said, noting that most of the benefit weighted toward the second half of the year as price increases flow through new orders.
GE HealthCare also flagged tariffs as a drag on quarterly profit.
First-quarter earnings included about 16 cents of tariff impact, which Saccaro said would be the largest quarterly hit this year.
The company expects tariff pressure to ease in subsequent quarters and said the total tariff impact in 2026 should be lower than last year, assuming current rates remain in place.
Despite the cost pressures, customer demand for diagnostic and imaging equipment remained healthy across regions, supported by solid procedure growth and a strong order backlog, Arduini said.
GE HealthCare expects 2026 adjusted profit of $4.80 to $5 per share, compared with its prior forecast of $4.95 to $5.15.
First-quarter adjusted earnings of $0.99 per share missed analysts’ estimate of $1.05, according to data compiled by LSEG.
(Reporting by Sahil Pandey in Bengaluru; Editing by Shreya Biswas)
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