CEO Arduini outlines steps to manage tariff costs
Analysts view GE HealthCare's forecast as conservative
Adds graphic, rewrites throughout, adds executive comments in paragraphs 2 and 5
By Puyaan Singh and Siddhi Mahatole
April 30 (Reuters) - GE HealthCare GEHC.O warned on Wednesday that the tariffs rolled out by U.S. President Donald Trump could impact its full-year profits by around $500 million, prompting the firm to plan a shift to local manufacturing to counteract the hit next year.
"We would look to shift (to) manufacture more local for local," finance chief Jay Saccaro said.
Shares of the company rose more than 3% after it beat Wall Street estimates for quarterly profit and revenue.
GE HealthCare said it was actively taking steps to manage the additional costs from tariffs, including decreasing imports between China and the U.S. and diversifying its sourcing.
The company plans to change its sources for exports to certain markets and also intends to switch where it gets components from, all of which should take "multiple months to move", CEO Peter Arduini said.
Without these steps, the hit to annual profit would have been $1.75 per share versus the 85 cents per share now expected, GE HealthCare said.
It also said it expects a smaller tariff hit in 2026, compared to this year.
Trump has been particularly focused on China, ratcheting up tariffs to eye-watering levels on a key source of raw materials for the pharmaceutical and medical device sectors.
GE HealthCare has 43 manufacturing sites across 17 countries including China. The Chinese market accounted for around 12% of its total revenues in 2024.
The bilateral China tariffs accounted for $375 million, or roughly 65 cents of the 85-cent impact per share, Saccaro said.
On an adjusted basis, the company now expects to earn $3.90 to $4.10 per share compared with its previous forecast of between $4.61 and $4.75 per share.
J.P.Morgan analyst Robbie Marcus said GE HealthCare is being "very conservative" with its forecast, as it expects that reciprocal levies could return to pre-pause levels in July.
BTIG analyst Ryan Zimmerman said the forecast assumed little for improving trade deals and seems to be a "worst case" scenario.
The medical device maker is also applying to get more of its products qualified under the United States-Mexico-Canada-Agreement trade pact, which would exclude it from Trump's duties.
GE Healthcare's recent quarterly results https://reut.rs/4iDWzKM
(Reporting by Puyaan Singh in Bengaluru; additional reporting by Siddhi Mahatole and Bhanvi Satija; Editing by Pooja Desai)
((Puyaan.Singh@thomsonreuters.com;))
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