Financial Data and Key Metrics Changes - Total revenue for the third quarter grew by 6%, with constant currency organic revenue also increasing by 6%, driven by volume and a 240 basis point price increase [8] - Gross margin increased by 90 basis points year-over-year to 44.6% [8] - EBIT margin decreased by 10 basis points to 23.3% compared to the previous year's third quarter [9] - Net income from continuing operations was $229 million, with adjusted earnings per diluted share increasing by 11% to $2.32 [10][11] - Free cash flow for the first nine months was $588 million, on track to meet the full-year guidance of approximately $700 million [12] Business Line Data and Key Metrics Changes - Healthcare constant currency organic revenue grew by 7%, driven by strong recurring revenue streams, while capital equipment revenue declined by 5% due to shipment timing [13][14] - AST constant currency organic revenue grew by 10%, with services growing by 10% and a slight decline in capital equipment shipments [15] - Life Sciences Group saw a 1% decline in constant currency organic revenue, with margins improving to 42.6%, benefiting from favorable mix pricing and the divestiture of CECS [17] Market Data and Key Metrics Changes - Orders in the healthcare segment grew over 10%, reflected in a $435 million healthcare backlog [14] - The company noted that while order growth remains robust, shipments were delayed due to customer project delays [14] Company Strategy and Development Direction - The company is tightening its revenue and earnings guidance for 2025, now expecting approximately 6% as-reported revenue growth and constant currency organic revenue growth [19] - The company is optimistic about the bioprocessing demand and believes it has worked through inventory challenges, expecting normalized growth going forward [30] - The company continues to invest in facilities and processes to meet or exceed environmental and regulatory standards [21] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism regarding the trends in the AST segment, noting that while there has been a recent uptick in growth, they are not ready to declare victory [45] - The management highlighted that the spending from healthcare customers remains strong, with no significant concerns about order structures [73] - The company is well-positioned to comply with existing regulations regarding ethylene oxide and does not anticipate changes in the current legislative environment [63] Other Important Information - The company incurred over $10 million in additional litigation expenses year-over-year due to ongoing legal matters related to ethylene oxide [9][20] - Capital expenditures for the first nine months totaled $299 million, with depreciation and amortization at $354 million [11][12] Q&A Session Summary Question: Concerns about Healthcare Capital Equipment - Management indicated that delays in shipments are due to customer readiness rather than hesitancy, with strong order growth still observed [26] Question: Trends in Bioprocessing Demand - Management noted optimism in bioprocessing demand, suggesting that the market is recovering from previous inventory challenges [30] Question: Potential Impact of Tariffs - Management is taking a wait-and-see approach regarding potential tariff reintroductions, emphasizing ongoing analysis of the situation [35] Question: Sustainability of Margin Performance - Management expressed confidence in the sustainability of margin improvements, driven by favorable volume, mix, and pricing [53] Question: Update on Ethylene Oxide Cases - Management confirmed that the retrial for the first ethylene oxide case is scheduled for May, with no additional cases added beyond what was previously disclosed [58] Question: Customer Concerns about Policy Changes - Management reported no significant concerns from customers regarding potential policy changes, with strong order growth in both healthcare and life sciences [71]

Core Viewpoint - STERIS plc reported third-quarter fiscal 2025 adjusted EPS of $2.32, reflecting a 9.9% increase year-over-year, aligning with Zacks Consensus Estimate, while revenues of $1.37 billion increased 5.6% year-over-year but missed estimates by 0.7% [1][3][12] Financial Performance - Adjusted EPS of $2.32, GAAP EPS of $1.75, up 17.4% from $1.49 year-over-year [1][2] - Revenues of $1.37 billion from continuing operations, a 5.6% increase year-over-year, but missed Zacks Consensus Estimate [3][12] - Organic revenues at constant exchange rate (CER) rose 6% year-over-year [3] Segment Performance - Healthcare segment revenues rose 7% year-over-year to $976.0 million, with consumable revenues up 9% and service revenues up 13%, partially offset by a 5% decline in capital equipment revenues [4] - Applied Sterilization Technologies (AST) revenues improved 10% to $258.1 million, driven by a 10% growth in service revenues [5] - Life Sciences segment revenues decreased 7% to $136.4 million, impacted by the divestiture of the CECS business, despite a 14% growth in consumable revenues [6] Margins and Expenses - Gross profit increased 9% to $610.3 million, with gross margin expanding 138 basis points to 44.5% [7] - Selling, general and administrative expenses rose 8.8% to $335.4 million, while research and development expenses increased 8.3% to $27.4 million [8] Cash Flow and Guidance - Cumulative net cash flow from operating activities reached $887.3 million, up from $718.5 million year-over-year [10] - Updated fiscal 2025 revenue guidance expects approximately 6% growth, down from earlier estimates of 6.5-7.5% [11] Overall Assessment - The earnings met estimates, but revenue performance was mixed, with growth in most segments except Life Sciences, attributed to a rebound in procedure volume and favorable pricing [12] - Margin expansion is a positive indicator, although the lowered revenue guidance may raise concerns [13]

STERIS (STE) Q3 2025 Earnings Call February 06, 2025 09:00 AM ET Company Participants Julie Winter - Vice President of Investor Relations & Corporate CommunicationsMichael Tokich - Senior VP & CFODaniel Carestio - President and Chief Executive OfficerJacob Johnson - Managing Director Conference Call Participants Brett Fishbin - Vice President & Equity Research AnalystMichael Polark - Senior Equity Research AnalystJason Bednar - Senior Research AnalystPatrick Wood - AnalystMike Matson - Senior Equity Researc ...

Core Insights - Steris reported revenue of $1.37 billion for the quarter ended December 2024, a decrease of 1.8% year-over-year, with EPS at $2.32 compared to $2.22 in the same quarter last year [1] - The revenue fell short of the Zacks Consensus Estimate of $1.38 billion, resulting in a surprise of -0.67%, while EPS met the consensus estimate [1] Financial Performance - Healthcare revenues were $976.04 million, below the average estimate of $983.64 million, reflecting a year-over-year increase of 6.5% [4] - Healthcare Products - Consumables generated $358.23 million, slightly above the estimate of $356.72 million, with an 8.7% year-over-year increase [4] - Healthcare Products - Capital equipment revenues were $254.80 million, below the estimated $285.02 million, showing a decline of 4.5% year-over-year [4] - Healthcare Products - Service revenues reached $363.01 million, exceeding the estimate of $341.91 million, with a year-over-year increase of 13.5% [4] - Life Sciences revenues totaled $136.38 million, below the estimate of $141.59 million, marking a 7% decline year-over-year [4] - Applied Sterilization Technologies (AST) revenues were $258.14 million, slightly above the estimate of $254.63 million, with a year-over-year increase of 9.9% [4] - Life Sciences - Service revenues were $36.64 million, below the estimate of $41.15 million, reflecting a 12% decline year-over-year [4] - Life Sciences - Capital equipment revenues were $31.06 million, exceeding the estimate of $28.74 million, but showing a significant decline of 30.7% year-over-year [4] - Life Sciences - Consumables revenues were $68.68 million, below the estimate of $78.26 million, with a year-over-year increase of 14.3% [4] Operating Income - Operating income for Healthcare was $246.92 million, surpassing the average estimate of $231.39 million [4] - Corporate and Other reported an operating loss of $100.84 million, worse than the average estimate of -$86.36 million [4] - Operating income for Applied Sterilization Technologies (AST) was $115.76 million, slightly above the estimate of $112.21 million [4] Stock Performance - Steris shares have returned +6.3% over the past month, outperforming the Zacks S&P 500 composite's +1.7% change [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating expected performance in line with the broader market in the near term [3]

Group 1 - Steris reported quarterly earnings of $2.32 per share, matching the Zacks Consensus Estimate, and showing an increase from $2.22 per share a year ago [1] - The company posted revenues of $1.37 billion for the quarter ended December 2024, missing the Zacks Consensus Estimate by 0.67%, and down from $1.4 billion year-over-year [2] - Steris shares have increased approximately 6.7% since the beginning of the year, outperforming the S&P 500's gain of 2.7% [3] Group 2 - The earnings outlook for Steris is mixed, with the current consensus EPS estimate for the coming quarter at $2.60 on revenues of $1.49 billion, and $9.08 on revenues of $5.48 billion for the current fiscal year [7] - The Medical - Instruments industry, to which Steris belongs, is currently ranked in the top 34% of over 250 Zacks industries, indicating a favorable outlook compared to the bottom 50% [8]

Financial Performance - Total revenue from continuing operations for Q3 fiscal 2025 increased 6% to $1.4 billion compared to $1.3 billion in Q3 fiscal 2024[2] - Net income for Q3 fiscal 2025 was $173.6 million or $1.75 per diluted share, up from $148.4 million or $1.49 per diluted share in Q3 fiscal 2024[3] - Adjusted net income for Q3 fiscal 2025 was $229.1 million or $2.32 per diluted share, compared to $207.6 million or $2.09 per diluted share in the prior year[3] - Healthcare revenue grew 7% to $976.0 million, driven by a 9% increase in consumable revenue and a 13% increase in service revenue[4] - Applied Sterilization Technologies (AST) revenue increased 10% to $258.1 million, with service revenue also growing by 10%[5] - Life Sciences revenue decreased 7% to $136.4 million, primarily due to the divestiture of the CECS business and a decline in capital equipment revenue[6] - Fiscal 2025 revenue outlook updated to approximately 6% growth, down from previous expectations of 6.5% to 7.5%[9] - Adjusted earnings per diluted share for fiscal 2025 is anticipated to be in the range of $9.05 to $9.15, reflecting a ten cent negative impact from currency[9] Cash Flow and Assets - Net cash provided by operations for the first nine months of fiscal 2025 was $887.3 million, compared to $718.5 million in the same period of fiscal 2024[7] - Free cash flow for the first nine months of fiscal 2025 was $588.1 million, up from $457.0 million in the prior year[7] - Free cash flow for the nine months ended December 31, 2024, was $588,104, an increase of 28.7% from $457,013 in 2023[25] - The company reported a free cash flow of $700,000,000 for FY 2025[32] Revenue Breakdown - Revenues for the three months ended December 31, 2024, increased to $1,370,570, a 5.6% rise from $1,297,724 in the same period of 2023[20] - The Healthcare segment generated revenues of $976,044 for the three months ended December 31, 2024, up 6.5% from $916,227 in 2023[23] - Total revenue for the nine months ended December 31, 2024, was $3,978.984 million, with a GAAP growth of 7.0% and organic growth of 6.3%[29] - The total revenue for the Healthcare segment for the nine months ended December 31, 2024, was $2,821.495 million, reflecting an 8.3% growth[29] - The Life Sciences segment had a revenue decline of 4.4% for the nine months ended December 31, 2024, with total revenue of $392.805 million[29] Profitability - Gross profit for the nine months ended December 31, 2024, reached $1,761,553, up 7.7% from $1,635,258 in 2023[20] - The company reported a gross profit of $610.332 million for Q4 2024, compared to $560.026 million in Q4 2023[30] - The company’s gross profit for the nine months ended December 31, 2024, was $650,490,000, compared to $615,784,000 in 2023, reflecting a 5.6% increase[31] Shareholder Returns - Net income attributable to shareholders for the nine months ended December 31, 2024, was $468,969, representing a 23.5% increase compared to $379,616 in 2023[20] - Earnings per share (EPS) for continuing operations increased to $1.76 for the three months ended December 31, 2024, compared to $1.50 in 2023, reflecting a 17.3% growth[20] - Adjusted diluted EPS for Q4 2024 was $2.32, up from $2.09 in Q4 2023[30] - Adjusted net income from continuing operations per diluted share is projected to be between $6.66 and $6.76 for FY 2025[32] - Adjusted net income from continuing operations per diluted share is expected to be between $9.05 and $9.15 for FY 2025[32] Liabilities and Assets - Total current assets decreased to $1,897,853 as of December 31, 2024, down from $2,869,123 as of March 31, 2024[21] - Total liabilities decreased to $3,579,816 as of December 31, 2024, compared to $3,817,249 as of March 31, 2024[21] - Cash and cash equivalents at the end of the period were $155,178, down from $207,020 at the beginning of the period[24] Backlog and Market Presence - The total backlog for continuing operations was $520,000,000, down from $534,433,000 in the previous year[33] - U.S. revenues accounted for 73% of total revenues, amounting to $1,002,586,000 in Q3 FY 2025, compared to $949,957,000 in Q3 FY 2024[33] - The international revenues for Q3 FY 2025 were $343,867,000, slightly up from $328,166,000 in Q3 FY 2024, maintaining 25% of total revenues[33]

Core Insights - STERIS plc reported a 6% increase in total revenue from continuing operations for Q3 fiscal 2025, reaching $1.4 billion compared to $1.3 billion in Q3 fiscal 2024 [1][8] - The company updated its fiscal 2025 outlook, expecting revenue growth of approximately 6%, down from previous expectations of 6.5% to 7.5% due to unfavorable currency rates and lower anticipated capital equipment revenue [7] Financial Performance - Net income for Q3 fiscal 2025 was $173.6 million, or $1.75 per diluted share, up from $148.4 million, or $1.49 per diluted share in Q3 fiscal 2024 [2] - Adjusted net income for Q3 fiscal 2025 was $229.1 million, or $2.32 per diluted share, compared to $207.6 million, or $2.09 per diluted share in the same period last year [2] Segment Performance - Healthcare revenue grew 7% to $976.0 million in Q3 fiscal 2025, driven by a 9% increase in consumable revenue and a 13% rise in service revenue, despite a 5% decline in capital equipment revenue [3] - Applied Sterilization Technologies (AST) revenue increased 10% to $258.1 million, with service revenue also growing by 10% [4] - Life Sciences revenue decreased 7% to $136.4 million, primarily due to the divestiture of the CECS business and a decline in capital equipment revenue, although consumable revenue grew by 14% [5] Cash Flow and Outlook - Net cash provided by operations for the first nine months of fiscal 2025 was $887.3 million, up from $718.5 million in the same period of fiscal 2024 [6] - Free cash flow for the first nine months of fiscal 2025 was $588.1 million, compared to $457.0 million in the prior year [6] - The company anticipates capital expenditures of approximately $360 million and free cash flow of around $700 million for fiscal 2025 [9]

Core Insights - Steris has consistently surpassed earnings estimates, making it a strong candidate for future earnings beats [1][2][3] Earnings Performance - In the last reported quarter, Steris achieved earnings of $2.14 per share, exceeding the Zacks Consensus Estimate of $2.11 per share by 1.42% [2] - In the previous quarter, the company reported earnings of $2.03 per share against an expectation of $2.01 per share, resulting in a surprise of 1% [2] Earnings Estimates - There has been a favorable change in earnings estimates for Steris, with a positive Earnings ESP of +0.57%, indicating bullish sentiment among analysts [3][6] - The combination of a positive Earnings ESP and a Zacks Rank of 3 (Hold) suggests a high likelihood of another earnings beat [6] Predictive Metrics - Stocks with a positive Earnings ESP and a Zacks Rank of 3 or better have a nearly 70% chance of producing a positive surprise [4] - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, reflecting the latest analyst revisions [5]

Wall Street analysts expect Steris (STE) to post quarterly earnings of $2.32 per share in its upcoming report, which indicates a year-over-year increase of 4.5%. Revenues are expected to be $1.38 billion, down 1.1% from the year-ago quarter.Over the past 30 days, the consensus EPS estimate for the quarter has remained unchanged. This demonstrates the covering analysts' collective reassessment of their initial projections during this period.Prior to a company's earnings release, it is of utmost importance to ...

STERIS plc (STE) is expected to release third-quarter fiscal 2025 results on Feb. 6, before market open. Find the latest EPS estimates and surprises on Zacks Earnings Calendar.In the last reported quarter, the company posted adjusted earnings per share (EPS) of $2.14, which beat the Zacks Consensus Estimate by 1.4%. STE beat on earnings in each of the trailing four quarters, delivering an average surprise of 1.18%.STE’s Q3 EstimatesThe Zacks Consensus Estimate for revenues is pegged at $1.38 billion, sugges ...