GE rattled in Q4 as X-ray business suffers
financial results in a tough 12 months that have seen the
laboratory imaging and diagnostics company feel the full force of
US Government regulatory pressure.
The healthcare unit of General Electric announced a fourth quarter profit of $1.04bn (€719.5m), down 4 per cent from last year's earnings of $1.08bn.
Despite the poor performance Jeff Immelt, GE Chairman and CEO stressed that, "the balance of the business is in good shape.
We expect Healthcare to improve in '08 ."
Immelt's claims were made in spite of events that occurred early last year.
Its Salt Lake City unit, GE OEC Medical Systems, was ordered by federal regulators to cease production of its X-ray medical imaging equipment because of current Good Manufacturing Practice (cGMP) deficiencies.
OEC Medical Systems division signed a consent decree with the US Food and Drug Administration (FDA) for a permanent injunction relating to these imaging systems.
The company also admitted feeling the effects of the Deficit Reduction Act of 2005 - legislation that caps Medicare reimbursement levels for medical imaging procedures, which GE claims limits access.
The legislation came into effect on Jan 1, 2007.
During a conference call, Immelt put on a brave face despite the company's difficulties, commenting that he was not expecting " tremendous growth ," from the firm's diagnostic imaging products.
However, he was adamant that GE Healthcare would exhibit positive net earnings for 2008, expecting a 5 per cent profit growth in Q1.
Despite the profit dip, GE Healthcare - the London-based parent of GE Healthcare Technologies, reported revenues of $5bn in the fourth quarter, up 6 per cent compared with $4.7bn for the same period a year ago.
Full-year results saw GE Healthcare post improved revenues of $17bn, an increase of 3 per cent from 2006's figure of $16.6bn.
Profit for the year decreased from $3.14bn to $3.06bn. UK-based GE Healthcare is a $17bn unit of General Electric.
The unit manufactures medical imaging equipment at GE Healthcare Technologies in Wisconsin, USA.
In January 2008, the company announced two partnerships, with PAA (Process Analysis and Automation) and MatriCal.
These partnerships would allow GE Healthcare to further extend its range of cellular analysis and automation solutions for its analyser imaging platform, In Cell.
