GE HealthCare (NASDAQ: GEHC) raises guidance and plans $945 million SOFIE purchase

What happened

GE HealthCare Technologies Inc. (NASDAQ: GEHC) reported third-quarter revenue of $5.5 billion, up 7.2%, and raised its full-year 2026 guidance on Oct. 28. Revenue and profit growth beat the company's expectations, and revenue rose in all segments.

Organic revenue, which leaves out acquisitions, disposals and currency swings, grew 6.2%. Orders show what is coming for a company that sells hospital equipment. Organic orders rose 4.0%, and book-to-bill was 1.03 times, meaning orders exceeded revenue. Backlog stood at $23.7 billion.

Net income attributable to GE HealthCare was $615 million against $446 million a year earlier. Adjusted EBIT, a non-GAAP measure, was $913 million against $761 million. Diluted EPS was $1.36 versus $0.98, and Adjusted EPS was $1.34 versus $1.07.

Key numbers

Metric	Latest	Change	Source
Revenue	$5.51 billion	from $5.14 billion, +7.2%	SEC 8-K, Exhibit 99
Net income attributable to GE HealthCare	$615 million	from $446 million, +37.9%	SEC 8-K, Exhibit 99
Adjusted EBIT	$913 million	from $761 million, +19.9%	SEC 8-K, Exhibit 99
Adjusted EBIT margin	16.6%	from 14.8%, +1.8 percentage points	SEC 8-K, Exhibit 99
Free cash flow	$793 million	from $483 million, +64.2%	SEC 8-K, Exhibit 99
SOFIE Biosciences purchase price (cash)	$945 million		SEC 8-K, Exhibit 99

Read more: GE HealthCare Technologies (GEHC) company research

Where the growth came from

Pharmaceutical Diagnostics grew fastest. Revenue was $846 million, up 13.0% and up 13.8% organically, with a segment EBIT margin of 29.9%. Advanced Imaging Solutions, the largest segment, posted $3.87 billion, up 6.1% and 4.5% organically, at a 15.3% margin.

Patient Care Solutions had revenue of $793 million, up 8.5% and up 8.8% organically. Its segment EBIT was $68 million, up 148.8%. Its margin of 8.6% was 480 basis points higher than a year earlier.

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Why it matters

OptimistFi has argued that GE HealthCare works if its installed base keeps turning hospital demand into recurring revenue while margins widen after the spin-off. The quarter fits that view. Adjusted EBIT margin rose to 16.6% from 14.8%. The filing credits volume, price and cost productivity, plus a favorable year-over-year net tariff impact, partly offset by inflation.

OptimistFi's calculation shows revenue up $370 million from the year-earlier quarter, net income attributable to GE HealthCare up $169 million and Adjusted EBIT up $152 million. Profit grew faster than sales. Net income rose 37.9% and Adjusted EBIT rose 19.9%, against 7.2% for revenue.

Some of that gain had help. The tariff benefit is one. A lower tax bill is another. Income before income taxes was $752 million against $643 million, while the effective tax rate fell to 17.1% from 27.8%.

Cash flow has a one-time item too. Operating cash flow of $907 million and free cash flow both include a $55 million tariff refund. Without it, OptimistFi calculates free cash flow would be $738 million, still above the $483 million of a year earlier.

Guidance, cash and the SOFIE deal

Management raised its full-year outlook. Organic revenue growth is now 4.0%, against 3.0% to 4.0% before. Adjusted EBIT margin is 15.5% to 15.7%, up from 15.4% to 15.7%. Adjusted EPS is $4.95 to $5.05, up from $4.80 to $5.00. Free cash flow is $1.6 billion or more, from $1.6 billion.

GE HealthCare also plans to buy SOFIE Biosciences from Trilantic North America for $945 million in cash. The company says the deal gives it a 'final mile' footprint for PET radiopharmaceutical supply in the U.S. It is expected to close in the first half of 2027, subject to customary closing conditions including regulatory approvals.

As of Sept. 30, the company held $2.9 billion of cash and cash equivalents, had access to $3.5 billion of revolving credit facilities and carried $10.0 billion of total debt. It declared a quarterly dividend of $0.04 per share for holders of record Oct. 23, up 14% from the previous quarter.

Patient Care Solutions changes leader

Jeannette Bankes told the company on Oct. 22 that she will resign as President and CEO of Patient Care Solutions. Her last day is Nov. 15. The company says she is leaving for a CEO role at a publicly traded company.

Neal Sandy, now head of PCS Product Strategy and Management, takes over on Nov. 16. The company says he brings more than 30 years of industry experience. The segment's strong quarter contrasts with a weaker nine months, with organic revenue down 4.5% from the same period of 2025.

What's next

Sandy's start on Nov. 16 opens the nearest test. Patient Care Solutions needs to hold its third-quarter growth under new leadership after nine months of organic decline.

The larger test is the SOFIE purchase. A close in the first half of 2027 would add the radiopharmaceutical supply footprint the company is paying $945 million in cash for. A regulatory delay would push that back.

The next quarterly report will show whether Adjusted EPS and free cash flow are on track for the raised ranges. It will also show whether margin gains hold once tariff effects are no longer a tailwind.

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