|GE Healthcare CEO John Flannery|
GE Healthcare ($GE) has been exploring ways to boost its healthcare business. In order to chart growth, the company will look inward instead of outward, CEO John Flannery said.
"When we look at the basic position of the company, we like the portfolio," Flannery told Bloomberg. "So my mandate right now is to get the earnings growth going again, and there's a lot to just better managing the portfolio we have, align it more with customers and outcomes, for a better margin rate."
The company's commitment to internal growth comes even after it reported slumping revenue. GE Healthcare's sales dropped 4% in 2015. Lower prices for its healthcare system business, which includes imaging equipment such as X-ray and magnetic resonance machines, is partly to blame, according to the company's 2015 annual report.
Government funding pressures, uncertainty surrounding Obamacare, market saturation and pricing pushback also hampered sales, Bloomberg Intelligence analyst Karen Ubelhart told the news outlet. "Margins were hurt by all of the above and cost pressures which GE was slow to respond to," Ubelhart said.
But Flannery has some ideas about how to get things back on track. The company will ramp up its data analysis services and life sciences business to offset declines in equipment sales. GE Health Cloud, which the company launched last year, will chip in at least 30% to 50% growth, Flannery figures.
Beefing up business in emerging markets could also drive growth. The company is creating products with lower prices and more basic functions that are geared toward developing countries.
China in particular could offer some opportunities for expansion. GE Healthcare's sales in China will probably expand by a percentage in the mid- to upper-single digits, Flannery told Bloomberg, as the country's rapidly growing hospital sector creates more opportunities for devicemakers.