GE HealthCare Technologies Inc. (NASDAQ:GEHC) Q4 2022 Earnings Call Transcript

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And so our estimates would be Q1, I think, is going to be a little bit choppy based on the type of products. If I think of flowable products like our PDx is tied to procedures, probably a lower level of a procedure volume in that quarter versus how we would see quarters two, three and four. But on equipment, we actually would expect that it’s still going to be reasonably strong and it’s driven by a different dynamic, which is the stimulus funds that are out there and requiring products to be taken on install. We also make some products that actually help assist with COVID patients whether it be monitoring events or other products in CT and stuff. So there’s a bunch of different activities going on, but we would expect that China will continue to ramp throughout the year.

And again, we can’t predict all the different changes that may take out, but our take at this point in time is Q1 a little bit more tempered and then continue improvement throughout the year.

Jason Bednar: Okay. That’s helpful. Thanks, Pete. And then maybe just as a follow-up with respect to price and I’ll come back to that topic here. Pete, you and the team do have a lot of confidence in price and tailwind supporting growth here going forward. I know we’ve talked a lot about price increases on products and goods, but I guess how are you seeing pricing play out in the services side of your business? And are you anticipating similar pricing power there over time with your service contracts? Thank you.

Peter Arduini: Yes. No, I think, look, I would just say on broader pricing, our job to get price really comes down to is to bring more value to the customer to help solve their problems. And the more we can create products that really solve a bigger issue, we can get our fair share of more pricing. And so having your organization, your teams aligned and thinking that way, having a gross margin focus as well, is something we’ve just driven across the company and build into compensation plans, build into focus. So I think that’s an important part. And it goes for both equipment and services. Obviously, with services, there’s a different type of horizon, usually multi-year how you think about it. We’re also investing in innovative new services, whether they be different types of remote capabilities, Again, when you think about the brake fix side of our business, these are highly valuable products that being down for half a day or a day can wipe out a lot of profits for the institution.

So if you have capabilities to be able to keep the product up running, customers are able to pay more for that. The other aspect is there are other services with an S on the end and some of those are digital on how you run your operation or how you can run capabilities. And in that €“ those cases, we can obviously ask for even higher prices as well as better margins than what we would have from normal brake fix. But we’ve been successful at taking selective increases. And again, with more of these advanced products, the related service contracts for them will also have a tail of better pricing down the road as well.

Operator: Our next question and our last question comes from Yuan Zhi with B. Riley. Your line is open.

Yuan Zhi: Good morning. This is Yuan, and thank you for taking our questions. I have a couple of them related to the pharmaceutical diagnostic business. First, on PDx. PDx was listed as a revenue priority. Can you elaborate between molecular imaging and contrast media, which segment would drive the growth you guys have mentioned? And I have a follow-up question. Thank you.

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