GE HealthCare trimmed its financial forecasts for the remainder of the year in the face of U.S. and international tariffs, despite posting better-than-expected returns for the first quarter.
The imaging giant said that while its sales projections are predicted to remain the same—following 10% year-over-year growth in orders booked last quarter—the company now expects to see shrinking profit margins and earnings per share as well as less cash on hand.
This year’s adjusted margin estimates were previously pitched at about 16.7%, up from 2024’s 16.3%—but with the high tariffs on trade between the U.S. and China, and the Trump administration’s current 10% tariffs on other countries across the world, that margin figure is expected to fall to about 14.3%.
Adjusted EPS, meanwhile, had plotted 3% to 6% growth, to land between $4.61 to $4.75. All told, GE HealthCare estimates tariffs could take a $1.75 bite out of that number—however, the company said that it is planning a series of short- and long-term mitigation efforts that could ultimately lessen that impact by more than half.
That includes decreasing the overall number of shipments between China and the U.S., which represents the lion’s share of GE HealthCare’s projected 2025 tariff costs, at about $375 million—swallowed largely in the latter half of the year, as higher-cost inventory moves through the company’s balance sheet.
Eventually it plans to pursue more local-for-local manufacturing across its 43 international sites, and it will also aim to increase the number of products that qualify for exemptions on duties on trade among the U.S., Canada and Mexico.
But across the Pacific, currently the company is getting hit both ways: It is a major importer of imaging hardware into China, and it also sources components from the country to supply its global production efforts.
To illustrate the weight of those tariffs, on the company’s earnings call, Chief Financial Officer Jay Saccaro offered what he described as a hypothetical, but unlikely, scenario: “If a U.S.-China agreement went into effect on May 1, and you had both sides improve by 100 points—so China goes from the 145% today to 45%, and exports go from 125% to 25%—we estimate that this would benefit EPS by about 40 cents for the year. It’s a big number for us. We’ll watch very closely to see how this plays out.”
By the end of this year, the company said total adjusted EPS could fall by 85 cents—assuming that the Trump administration’s global reciprocal tariffs increase after the expiration of their 90-day pause, set for early July. In 2026, after more complicated mitigation moves come online across the supply chain, the company said EPS impact would drop even further.
Finally, a drop in free cash flow for 2025 was attributed exclusively to tariff payments, moving the previously projected floor of $1.75 billion down to at least $1.2 billion.
“First quarter results reflect strong execution as we start the year with robust revenue, orders and profit growth, which were driven by strength in the U.S.,” President and CEO Peter Arduini said in a statement. “We remain focused on delivering on our precision care and growth acceleration strategies, underscored by the closing of our acquisition of Nihon Medi-Physics, which we expect will increase global access to our next-generation radiopharmaceuticals.”
“Regarding the current global trade environment, we are actively driving mitigation actions,” Arduini added. “We continue to see strong customer demand in many of the markets we serve and are well-positioned to drive long-term value as we invest in future innovation.”
On the call with investors, Arduini said double-digit order growth in the U.S. market was particularly focused on imaging in cardiology and oncology, while the company saw gains across its business segments.
Arduini also addressed the recent opening of an anti-dumping investigation by China’s commerce ministry into international makers of CT X-ray tubes, saying the company did not expect the probe to have a material effect on business.
Revenues in the first quarter topped $4.8 billion, up 3% versus the same period last year, while net income grew to $564 million compared to $374 million.
That includes $2.14 billion in imaging scanner sales, up 5%, while advanced visualization—which counts the company’s ultrasound units—delivered $1.24 billion for a 3% gain in revenue. Patient monitoring and care brought in $753 million, for a 2% increase, while pharmaceutical diagnostics grew 8% to $632 million.