Investors sent GE HealthCare into the red Wednesday morning as the company revealed it was cutting its profit outlook while also making structural changes to its business and executive teams.
First, the profit reduction. In its first-quarter results posted April 29, GE President and CEO Peter Arduini said profitability in Q1 “was impacted by a [Pharmaceutical Diagnostics] supplier issue that has since been resolved,” but that more pain is to come this year.
“We saw significant increases in memory chips, oil and freight costs during the first quarter that we assume will impact the rest of 2026,” he said. This comes amid the backdrop of the U.S. conflict with Iran.
The CEO said GE will now take a “prudent approach” and cut its profit outlook, although it expects “to offset more than half of the inflation impact with price and cost actions.”
Total sales for the quarter were up 7.4%, including organic revenue growth of 2.9%, reaching $5.1 billion.
In a separate release, GE also announced a “strategic evolution of its operations and executive leadership team.”
This will see it create a new business segment, Advanced Imaging Solutions (AIS), merging its former Imaging and Ultrasound units under one umbrella, led by Phil Rackliffe.
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GE HealthCare’s two formerly largest segments are being combined to “create a more focused and connected end-to-end imaging ecosystem,” the company said in a statement.
Its two other major business units, Pharmaceutical Diagnostics (PDx) and Patient Care Solutions (PCS), “will continue to operate as separate segments,” GE said.
The creation of AIS has also led to some executive changes. Roland Rott, formerly president and CEO of Imaging, will leave the company “to pursue external opportunities.”
Elie Chaillot, previously president and CEO of Europe, the Middle East and Africa, and Rest of World, will take on a strategic role focused on high-priority initiatives and special projects, reporting to Arduini.
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That change comes as Catherine Estrampes is named chief commercial and growth officer and will lead Global Markets, a newly created region encompassing every market except China, which will continue to be led by Will Song. The move is aimed at strengthening how GE HealthCare’s commercial teams scale expertise across regions and bring the full portfolio to customers globally, the company said.
Shares in GE HealthCare fell 10% in premarket trading early Wednesday morning.
