By Khushi Mandowara and Leroy Leo
(Reuters) – General Electric Co said on Thursday it expects its healthcare unit, which is to be spun off into a separate company early next year, to have a medium-term organic revenue growth in mid-single-digits.
GE expects the healthcare unit’s medium-term adjusted core earnings margin to be close to 20%.
GE Healthcare expects an aging population, chronic diseases and a rise in the middle class in a number of emerging markets to drive growth targets for the company, the unit’s Chief Executive Officer Peter Arduini said at an investor day conference.
The company’s medium-term goal for core earnings margin “should be well received in light of concerns around the R&D step-up that might be needed”, said Barclays analyst Julian Mitchell in a note.
The healthcare company had revenue of $18 billion last year, with about half of it from recurring sources, GE Healthcare said in a presentation.
General Electric had outlined plans in November last year to split into three publicly traded units focused on healthcare, aviation and energy as it aimed to simplify business and pare down debt.
GE Healthcare will operate imaging and ultrasound devices, patient care solutions and pharmaceutical diagnostics businesses.
The healthcare unit is set to complete its spin off after market on Jan. 3, with public trading being set from the next day onwards.
(Reporting by Khushi Mandowara and Leroy Leo in Bengaluru; Editing by Krishna Chandra Eluri)
