GE HealthCare Raises Revenue Growth Forecast to About 4% as Backlog Reaches $23.7 Billion
Key Facts
GE HealthCare raised its forecast for 2026 organic revenue growth on October 28 to about 4%, from a previous range of 3% to 4%, in a revision the company said reflected improved performance year to date and business momentum. The announcement came with third-quarter results showing revenue of $5.5 billion, up 7.2%, while organic growth was 6.2%. Chief Executive Peter Arduini said, "Our improved performance since the beginning of the year and business momentum are driving us to raise our outlook for the year." The company reported growth across all segments during the quarter. On November 10, the stock closed at $83.65, according to EL7 data.
The revision covered profitability and cash flow metrics, with the company raising its 2026 adjusted EBIT margin forecast to a range of 15.5%-15.7%. It also raised its adjusted earnings-per-share forecast to $4.95-$5.05, from a previous range of $4.80 to $5.00. Free cash flow is now estimated at $1.6 billion or more, versus a previous estimate of about $1.6 billion. These changes reflect a broader revision to the annual outlook, not just the revenue estimate. Arduini linked the decision to performance accumulated through the year and business momentum.
On the demand side, total orders grew 4.0% organically in the third quarter, and the book-to-bill ratio was 1.03 times. Backlog reached $23.7 billion, and the company said healthy demand supported these figures. This followed a second quarter in which orders posted record organic growth of 11.1%, with a book-to-bill ratio of 1.15 times and backlog at $23.9 billion. The company had left its annual outlook unchanged that quarter. By comparison, backlog at the end of the third quarter was below its level at the end of the second quarter, while order growth and the book-to-bill ratio slowed.
Third-quarter results showed different growth rates across the diagnostics and imaging businesses. The Pharmaceutical Diagnostics segment posted organic revenue growth of 13.8%, supported by contributions from contrast media and radiopharmaceutical products. Revenue in the Advanced Imaging Solutions segment rose 4.5% organically, supported by computed tomography, cardiovascular and interventional solutions, and surgical innovations. The company said growth across all segments contributed to the increase in total revenue during the period. The figures show that demand supporting orders coincided with growth in pharmaceutical diagnostics and imaging, at different rates across the two segments.
Adjusted EBIT margin improved to 16.6% in the third quarter, from 14.8% in the same period a year earlier, an increase of 180 basis points. The company attributed the improvement to volume, price and cost productivity, as well as a favorable year-over-year impact from net charges. It said inflation offset part of the improvement. This puts the annual margin target of 15.5%-15.7% in the context of the profitability improvement recorded during the quarter, with cost pressures remaining among the factors at play. The annual revision came as the quarterly margin was above the revised full-year forecast range.
On the next management move, the company announced the appointment of Neil Sandy as chief executive of its Patient Care Solutions segment, effective November 16, 2026. Sandy is currently the segment's head of product strategy and management, and the company said he has more than 30 years of industry experience. He will succeed Janette Banks, who is leaving to become chief executive of a publicly listed company. The appointment follows the third-quarter results and the increase in the annual outlook. The company has set the date for the segment's operational leadership transition in mid-November.