(Reuters) – GE HealthCare Technologies missed first-quarter revenue estimates on Tuesday, hurt by lower sales in China market and weaker-than-expected demand for its scanning devices, sending its shares tumbling as much as 12% before the bell.
The medical device maker’s revenue from China market, which constitutes nearly 13% of its total revenue, dropped more than 11% in the quarter ended March 31.
“Many of GE HealthCare’s suppliers were noting weakness in China last quarter, so it makes some sense that we would see that come through (to this quarter),” BTIG analyst Ryan Zimmerman said.
The company, at an investor conference last month, had said it expects a sales decline in China during the first half of the year. It expects to see growth in the second half with the end of the Chinese government’s anti-corruption campaign that began last year.
The company is also facing pressure from the Chinese government’s volume-based procurement, under which the country buys drugs and medical devices in bulk at a sharp discount.
GE HealthCare’s total sales came in at $4.65 billion in the quarter, missing LSEG estimates of $4.8 billion.
Sales at its imaging unit — the largest among the company’s four segments — were $2.47 billion, also below analysts’ estimate of $2.61 billion.
The company’s three other units are ultrasound, patient care solutions and pharmaceutical diagnostics.
On an adjusted basis, it earned $0.90 per share in the first quarter, compared with the $0.91-per-share estimated.
GE HealthCare, however, maintained its full-year adjusted profit-per-share forecast in the range of $4.20 to $4.35.
(Reporting by Mariam Sunny in Bengaluru; Editing by Shilpi Majumdar)