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GE Healthcare's Revenues Flat in Q1 as Profits Tumble

NEW YORK (GenomeWeb News) – GE today reported that first-quarter revenues for its GE Healthcare unit were flat with the first quarter of 2007 due partially to a “difficult US environment,” and that its profit shrank 17 percent for the segment.
 
GE Healthcare had revenues of $3.9 billion for the three months ended March 31, essentially the same figure for the comparable period of 2007. The firm said the US equipment market remains soft, with diagnostic imaging orders down 13 percent in the first quarter. However, diagnostic imaging revenues internationally were up 8 percent in the quarter, and life sciences sales in Europe were up 24 percent, GE said.
 
GE Healthcare reported a profit of $528 million in the quarter, down from $637 million in Q1 2007.
 
“Healthcare earnings were impacted by a difficult US environment and continued regulatory shipping restrictions on the surgical supplies business,” GE Chairman and CEO Jeff Immelt said in a statement.
 
Overall, GE reported first-quarter revenues of $42.2 billion, up 8 percent over revenues of $39.2 million in the first quarter of 2007. The firm’s net earnings dropped 6 percent to $4.3 billion from $4.6 billion, and its earnings per share dropped 2 percent to $.43 from $.44.
 
“Our focus on globalization has helped sustain the company during the US slowdown,” said Immelt. “Nevertheless, we failed to meet our expectations. Our primary shortfall was a decline in financial services earnings.”
 
The firm expects GE Healthcare to report second-quarter revenue growth of roughly 5 percent.
 
GE also lowered its forecast for full-year earnings per share to $2.20 to $2.30 per share from its previous guidance of at least $2.42 per share. It expects to report second-quarter earnings per share of $.52 to $.54 and revenues of $45 billion, which would be a 6 percent gain on the second quarter of 2007.
 
In early trade on the New York Stock Exchange, GE’s shares fell 11.8 percent to $32.40.