GE Healthcare (NYSE:GE) isn’t terribly optimistic about its prospects for the rest of this year as its 2nd-quarter earnings report again shows softness in the U.S. dragging down total healthcare activity.
Despite some boosts in Latin America and China, U.S. sales dropped 2% for the 3 months ended June 30, leaving the entire division flat for the quarter.
GE reported today that its healthcare business tallied $730 million in profits on $4.48 billion in sales in its 2nd quarter 2014, compared with $736 million in profits on $4.49 billion in sales during the same period last year. That amounts to a 0.2% drop in revenues and a 0.6% increase in profit year-over-year.
"Healthcare in the 2nd quarter was again soft in the U.S. as we expected," senior vice president and CFO Jeff Bornstein said in a conference call with analysts. "In-patient volumes were weak which, in conjunction with increased consumer resume and the changes in the Healthcare Law, appear to be causing hospitals and the clinics continue to be cautious on the new investments."
That marks another quarter of sluggish healthcare activity for the industry titan, which last quarter reported profits of $570 million on sales of $4.20 billion for the 3 months ended March 31, for a bottom-line decline of 4.2% and a top-line slide of 2.1% compared with the same period last year.
GE had previously advised that its healthcare business could reach high-single-digit or low-double-digit growth this year, but the company walked back that guidance this week.
"For the 2nd half, we expect the market dynamics to be similar to the 1st half with weakness in the U.S., but continued growth in life sciences and the growth regions," Bornstein said. "We expect that healthcare will grow earnings single-digits for the year."