Bloomberg News

GE Says Health-Equipment Investments Yield $1.5 Billion in Sales

November 30, 2011

Nov. 28 (Bloomberg) -- General Electric Co.’s investments in new health-care equipment and devices introduced this year, including processes that limit radiation exposure from imaging scans, will generate about $1.5 billion a year in new revenue.

“We’ve made significant investments in technology over the last few years and the good news is that technology is coming to bear now,” Tom Gentile , the executive who leads the health- care unit’s largest segment, said today in a telephone interview. The products, which include the low-radiation Veo image-construction process for CT scanners and DoseWatch exposure tracking, “are getting traction,” he said.

GE Healthcare, the world’s largest maker of imaging equipment, plans to raise research and development spending to $800 million over 15 years to create machines and software that emit less radiation, the company said in a statement today. That’s increase of $300 million from the previous target.

This year, 56 new products debuted in Gentile’s unit and another 69 are planned for 2012, he said. GE estimates it gained about 1 percentage point of share in a $27 billion global market for imaging equipment and devices, said Gentile, who took over the GE Healthcare segment that includes MRI scanners and X-ray machines in May.

“We saw our market share grow by about a point globally this year and we expect continued growth next year,” he said by telephone from the Radiological Society of North America’s annual gathering in Chicago.

Two Big Regions

Gentile expects sales to be “flat to slightly up” in 2012 in developed markets, which include Western Europe, the U.S., and Japan, as Europe’s sovereign debt crisis curbs spending. Developing markets should grow faster, with revenue gaining about 10 percent in Latin America and Eastern Europe, as much as 13 percent in China and 15 percent in India, he said.

“We really do see a separation of the two big market regions,” Gentile said.

In the U.S., growing demand for more efficient products is helping to drive sales of MRI scanners that offer improvements such as a wider surface for patients to lie on without compromising image quality. The new machines are more comfortable for patients and require less time for procedures, increasing volume for health-care providers, he said.

“You don’t now just have the clinical aspects of the decision, which is of course very important, but you’re also looking at more issues related to productivity and economics,” Gentile says. “Being able to deliver new products that meet all the criteria is becoming increasingly important.”

GE Healthcare, based in Chalfont St. Giles, England, near London, provided $16.9 billion of the parent company’s $150.2 billion in sales last year, according to the GE’s most recent annual report.

About 53 percent of the division’s sales last year came from outside the U.S., a trend GE Healthcare CEO John Dineen has said will continue. The division forecasts a sales increase of 5 to 10 percent annually, with profit rising about 10 percent on the same basis.

--Editors: James Langford, Niamh Ring

To contact the reporter on this story: Rachel Layne in Boston at rlayne@bloomberg.net

To contact the editor responsible for this story: Ed Dufner at edufner@bloomberg.net


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