Medical Imaging

The Medical Imaging Economy

Third Quarter

With economic warning signs flashing brighter by the day, and hospitals continuing to struggle, it’s hard not to be concerned about medical imaging’s economic situation. However, the major imaging companies’ latest round of earnings suggest that there might be more reasons to remain confident. 

  • Agfa – Agfa’s two imaging divisions had very different Q3s, as HealthCare IT posted solid revenue and earnings growth (+25.7% to $64M; +63.4% to $4.1M EBIT), and Radiology Solutions saw modest revenue growth and a big earnings decline (+1.5% to $121M; -69.3% to $2.9M EBIT).
  • Canon – Canon Medical Systems continued its upswing, posting solid revenue (+9% to $908.5M) and operating profit (+7.5% to $46M) growth amid rising orders and strong post-COVID demand.
  • Fujifilm – Fujifilm’s Healthcare unit posted yet another positive quarter, as imaging drove big increases to revenue (+17.1% to $1.7B) and operating income (+24.4% to $236M). 
  • GE HealthCare – GE HealthCare posted its third straight quarter of revenue growth (+10% to $4.6B), while inflation led to slightly lower profit ($700M).
  • Hologic – The semiconductor shortage caused Hologic’s breast imaging revenue to fall yet again (-20.2% to $212M), while the company’s overall net income plummeted (-63.9% to $118.7M).
  • Konica Minolta – Konica Minolta’s Healthcare revenue increased for the second straight quarter (+14% to $254M), although the division continued to operate at a loss (-$18M).  
  • Philips – Philips’ Diagnosis & Treatment division’s comparable sales fell for the third straight quarter (-2% to $2.37B) due to component shortages, while division profit also declined (Adjusted EBITA -31.6% to $216M).
  • RadNet – RadNet posted another quarter of rising revenues (+5.2% to $350M), although the labor shortage and related payroll inflation cut into its profitability (Adjusted EBITDA -16.1% to $45.8M).
  • Siemens Healthineers – Siemens’ imaging business remained the company’s (and industry’s) top performer, as strong MRI and CT sales drove yet another quarter of revenue growth (+8.1% to $3.35B) and solid margins (Adjusted EBIT +22.4% to $776M).

Although several companies noted economic and inflation headwinds, nearly every earnings report forecasted positive Q4s and 2023s, as supply chain challenges subside and the post-COVID demand surge continues. 

The Takeaway

There are plenty of reasons to be concerned about the economy. However, most companies still reported solid healthcare/imaging financials, and most factors that hurt Q3 performances are likely to improve throughout 2023. Plus, healthcare is historically insulated from economic downturns. 

That doesn’t mean that the next year (or two) will be easy, but it does suggest that medical imaging could fare better than many sectors of the overall economy.

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