GE HealthCare Technologies (NASDAQ:GEHC) executives told investors at a Barclays conference that the company’s direct exposure to the Middle East is “definitely less than 5%” of overall business, while management is prioritizing employee safety and business continuity amid regional disruptions.
Barclays analyst Matt Miksic hosted the discussion with GE HealthCare leaders including Jay Saccaro and Phil Rackliffe, who addressed topics ranging from supply chain resiliency and tariffs to competitive dynamics in contrast media and the company’s near-term product pipeline.
Middle East exposure and supply chain priorities
To mitigate operational risk, executives emphasized ensuring logistics corridors to move product out of Israel and maintaining adequate inventory outside conflict zones. While the company did not provide detail on specific product line sourcing, management said lessons from COVID-19 and tariffs reinforced the need for dual sourcing, supply chain agility, and resiliency, and noted that shifting manufacturing “to different zones” is an ongoing effort discussed previously on earnings calls.
Oil price uncertainty and potential cost levers
Asked about oil prices and potential impacts to costs, management said it is “way too early” to quantify implications. Saccaro said GE HealthCare has “a number of levers” to offset potential cost increases, including pricing actions to reflect changes in input costs and ongoing productivity initiatives that management said have progressed over the past several years.
Executives added that GE HealthCare does not have a large resin component in its cost structure, describing oil price sensitivity as more tied to logistics costs than raw material exposure. In comparing to energy cost inflation in 2022, management said the playbook would be similar—careful pricing and cost initiatives—while noting the current situation’s duration remains uncertain and will be evaluated in upcoming forecasting cycles.
Tariffs: prior mitigation and current framework
On tariffs, management reiterated prior disclosures that tariffs totaled about $250 million last year and are expected to be less than that this year. Saccaro described tariff mitigation as an early proof point for the company’s Heartbeat business system, outlining a process of daily and weekly management, detailed tracking, and project plans that reduced an initially estimated “tariff bill” of about $1 billion to $500 million and ultimately to $250 million after rate changes.
Management also discussed recent policy developments, including a Supreme Court ruling that removed IEEPA tariffs, followed shortly by implementation of Section 122 tariffs. Saccaro said Section 301 and Section 232 tariffs were unchanged. Based on the company’s calculations, he said replacing IEEPA tariffs with Section 122 tariffs—assuming Section 122 remains in place for the remainder of the year—results in “basically” a similar overall impact. He added that timing and potential refunds could create questions around cash flow and income statement effects in the short term.
In reflecting on supply chain changes made in response to tariffs, Saccaro said the company tried to view decisions through a “no regrets lens,” arguing that many of the moves aligned with building a “diverse, resilient, agile supply chain” capable of withstanding supply shocks.
Contrast media competition and GE HealthCare’s positioning
Management also addressed competitive developments in contrast media, including Amneal’s plans to launch products tied to GE HealthCare’s iohexol. Saccaro said the company’s guidance and midterm aspirations were set with awareness of Amneal’s expected launch and strategy. He characterized the market as having multiple competitors for a long time, with GE HealthCare as the leader but facing near-proxy competition that has performed well historically.
Executives highlighted several factors they believe can differentiate performance in what are otherwise generic products, including:
- Consistency of supply, citing prior industry shortages tied to manufacturing issues
- Product quality
- Brand recognition and hospital relationships
- Portfolio breadth, noting GE HealthCare sells “20 SKUs” in the category
Saccaro added that demand for the product continues to grow while supply remains “relatively tight,” which management believes supports continued opportunity for growth.
Growth outlook and product launches
Discussing the company’s 3% to 4% growth framework, Saccaro said much of the near-term outlook is supported less by new imaging innovation and more by commercial execution from the prior year. He cited “large customer collaborations” and referenced deals such as Sutter and a newly announced collaboration with UCSF. Management said these efforts contributed to a “record backlog,” up $2 billion year over year, which they described as a key underpinning of the current-year growth expectation. Saccaro said the first quarter is expected to be lower, with the remainder of the year trending more toward mid-single-digit growth.
Rackliffe highlighted recent product momentum in ultrasound and interventional technologies. He said the company launched three products in the prior quarter:
- Vivid Pioneer in cardiovascular ultrasound, which he said reduces exam time with fewer clicks and includes AI-driven tools geared toward interventional cardiology and structural heart applications; he said performance is exceeding internal estimates.
- Allia Moveo, a next-generation interventional gantry/X-ray platform for interventional cardiology and radiology, launched at ECR in Vienna and previously shown at RSNA; he said the first two installs have occurred and early reception is strong.
- LOGIQ R5 general ultrasound imaging, which he said can reduce scan time by 60% with 80% fewer clicks, aiming to improve access and consistency of care.
On larger imaging platforms—total-body PET and photon-counting CT—management said the company does not currently participate in those segments but expects to bring offerings to market. Saccaro said there may be limited sales impact in the fourth quarter, with the “lion’s share” of revenue contribution expected in 2027, given the time required for orders and hospital installation cycles. Management expects orders to begin in the second half of the year, with ultrasound products generally converting from order to revenue faster because many are mobile systems.
About GE HealthCare Technologies (NASDAQ:GEHC)
GE HealthCare Technologies (NASDAQ: GEHC) is a global medical technology and diagnostics company that develops, manufactures and markets a broad range of products and services for healthcare providers. Its portfolio centers on diagnostic imaging systems, including MRI, CT, PET and X-ray modalities, as well as ultrasound equipment. The company also supplies patient monitoring and anesthesia delivery systems, interventional and surgical imaging solutions, and molecular imaging technologies used in both clinical care and research settings.
In addition to hardware, GE HealthCare offers software, analytics and lifecycle services aimed at improving clinical workflows and equipment uptime.
