Tariffs to Dent GE HealthCare Profits by $500M; Firm Eyes Supply Chain Overhaul
GE HealthCare reported that $375 million, or about 65 cents of the 85-cent per share impact, was due to tariffs on bilateral trade between the U.S. and China.
GE HealthCare has cautioned that newly imposed U.S. tariffs—linked to policies reinstated under President Donald Trump—could impact its full-year profits by approximately $500 million.
In response, the company is preparing to shift more of its manufacturing operations to "local for local" production beginning next year.
Tariff Impact & Strategic Adjustments
Chief Financial Officer Jay Saccaro stated that the company is actively exploring alternatives to mitigate the tariff burden. These include reducing imports between the U.S. and China, diversifying supply sources, and adjusting manufacturing locations.
"We would look to shift to manufacture more local for local," Saccaro said, underscoring GE HealthCare's commitment to reducing dependence on tariff-exposed trade routes.
Despite the tariff concerns, GE HealthCare shares rose more than 3% following better-than-expected earnings for the recent quarter.
The company also said that, without mitigation efforts, the impact on earnings would have been $1.75 per share, compared to the current expected hit of 85 cents per share.
CEO Peter Arduini noted that operational changes such as rerouting exports and switching component suppliers are underway but will take several months to implement.
Tariffs Tied to U.S.-China Trade Tensions
GE HealthCare reported that $375 million, or about 65 cents of the 85-cent per share impact, was due to tariffs on bilateral trade between the U.S. and China.
The company operates 43 manufacturing sites in 17 countries, including China, which contributed 12% of total revenue in 2024.
The company expects a smaller tariff impact in 2026, indicating that ongoing mitigation strategies will help soften the blow.
GE HealthCare now forecasts adjusted earnings per share between $3.90 and $4.10, down from the previous estimate of $4.61 to $4.75.
Analysts from J.P. Morgan and BTIG described the revised guidance as conservative, noting that the company assumes limited progress on improving trade agreements.
To further shield itself, GE HealthCare is seeking to qualify more products under the United States-Mexico-Canada Agreement (USMCA), potentially exempting them from Trump-era duties.
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