By Charley Grant 

Add General Electric to the list of businesses concerned about the risks from health policy uncertainty.

Chief Executive Jeffrey Immelt noted on the fourth-quarter earnings conference call that the U.S health-care business faces some risks as a result. G.E. reported overall sales of $33.1 billion, which fell short of analyst forecasts, and adjusted earnings of 46 cents a share, which matched consensus.

President Donald Trump has vowed to repeal the Affordable Care Act without spelling out precisely what will replace it. Until the new administration more clearly spells out its policy goals, it remains unclear whether the number of Americans without insurance will decline.

That has the potential to delay or alter plans of GE's customers to purchase costly hospital equipment such as mammography systems.

The good news for shareholders: GE's health-care business has a global presence and its forecast was fairly upbeat for non U.S. businesses. Mr. Immelt added that the ACA's status is a potential future risk and not currently affecting sales. The fourth-quarter numbers bear that out -- health sales grew 3% from a year earlier to $5.1 billion. Operating profit in the segment of just over $1 billion was up 10%.

Still, the issue matters for GE -- health-care is the company's third-largest business by sales. And while Mr. Immelt indicated that the troubled oil-and-gas segment has bottomed, there is a risk that a health-care stumble would offset that positive momentum.

Changes to American health-care policy might be the biggest issue for investors in the health-care sector to follow this year. GE gives credence to the notion that investors will be better off if those changes come sooner rather than later.

Write to Charley Grant at charles.grant@wsj.com

 

(END) Dow Jones Newswires

January 20, 2017 12:32 ET (17:32 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
General Electric (NYSE:GE)
Historical Stock Chart
From Feb 2024 to Mar 2024 Click Here for more General Electric Charts.
General Electric (NYSE:GE)
Historical Stock Chart
From Mar 2023 to Mar 2024 Click Here for more General Electric Charts.