General Electric’s Healthcare Revenue Rose in 1Q17
General Electric’s Healthcare revenue
In 1Q17, General Electric’s (GE) Healthcare segment had a 16.5% share in the company’s $26.0 billion industrial revenue. GE has a huge investment in this segment, reflected in its research and development spending. Healthcare revenue was $4.3 billion, a rise of 3.0%, in 1Q17.
The segment’s operating profit rose 2.0% in 1Q17 to $643.0 million on a year-over-year basis. However, GE recorded a fall of 10 basis points for the Healthcare segment’s operating margin in 1Q17.
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GE’s Healthcare orders in 1Q17
The Healthcare segment’s orders rose 7.0% to $4.5 billion in 1Q17, while organic orders rose 8.0%. Organic orders rose 21.0% in emerging markets. China led emerging markets with a 28.0% rise in orders. The Middle East followed China with a 16.0% rise in orders. Latin American orders rose 14.0%.
In 1Q17, GE acquired the United Kingdom’s Monica Healthcare to enhance its mobile and digital offerings. In addition, the company announced a $40.0 million capacity expansion at Monica Healthcare’s production plant in South Carolina. In China, GE won ~$40.0 million in contracts to supply multimodal equipment and solutions to the Hainan Tumor Hospital in China.
The Healthcare segment is targeting further cost savings in line with the $450.0 million savings realized in 2016. Riding on cost-saving gains, GE intends to launch 25 new products in 2017. The company anticipates sound growth in the Asia Pacific, Africa, and China regions.
With the possibility of the Affordable Care Act (Obamacare) being changed or scrapped, GE foresees some uncertainties in the United States. However, the company expects a stable Europe. With its 300 cost-out engineers backed by expanding its Brilliant Factories worldwide, GE is aiming for ~5.0% organic revenue growth in the segment.
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Next, let’s take a look at the performance of GE’s Transportation segment in 1Q17.