GE HealthCare cuts revenue growth forecast for 2024 on China woes

(Reuters) -GE HealthCare cut its revenue growth forecast for the year on Wednesday, as a freeze in China's healthcare sector due to an anti-corruption drive dragged down sales of its imaging machines and other medical equipment, sending its shares down 10%.

Beijing kicked off the year-long crackdown on the sector in July last year, targeting the bribing of doctors in drug and medical equipment sales that sent a chill through the industry and pummeled healthcare stocks.

The effects of the anti-corruption campaign and the delay in the China 2024 stimulus could likely hurt sales and orders in the near term, GE HealthCare said, while adding that it could not predict the exact duration or magnitude of the hit.

A majority of GE HealthCare's revenue in China comes from the sales of ultrasound and imaging devices, with the Chinese market accounting for 14.2% of its total revenue in 2023.

In the second quarter, the company's sales from China declined 18.3% to $583 million from a year earlier.

Merck has also said that China's anti-corruption drive was impacting the sales of its Gardasil vaccine, which is used to prevent cancer from human papillomavirus.

GE HealthCare's total quarterly revenue of $4.84 billion missed analysts' average estimate of $4.87 billion, according to LSEG data.

The Chicago-based company also cut its organic sales growth forecast to a range of 1% to 2% from about 4% expected previously.

However, the medical device maker's second-quarter adjusted profit of $1 per share beat Wall Street estimates of 98 cents per share.

(Reporting by Puyaan Singh and Leroy Leo in Bengaluru; Editing by Anil D'Silva)