In This Article:
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Total Revenue Growth: 6% reported growth, 6% constant currency organic growth.
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Gross Margin: Increased by 90 basis points to 44.6%.
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EBIT Margin: Decreased by 10 basis points to 23.3% of revenue.
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Net Income: $229 million from continuing operations.
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Adjusted Earnings Per Diluted Share: $2.32, an 11% increase over last year.
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Capital Expenditures: $299 million for the first nine months of fiscal 2025.
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Depreciation and Amortization: $354 million for the first nine months of fiscal 2025.
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Total Debt: $2.2 billion, with a debt to EBITDA ratio of approximately 1.5 times.
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Free Cash Flow: $588 million for the first nine months, on track for $700 million full-year guidance.
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Healthcare Segment Revenue Growth: 7% constant currency organic growth.
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AST Segment Revenue Growth: 10% constant currency organic growth.
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Life Sciences Group Revenue Decline: 1% constant currency organic decline.
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Adjusted Effective Tax Rate: 24.5% for the quarter.
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Healthcare Backlog: $435 million.
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2025 Revenue Outlook: Approximately 6% growth in both reported and constant currency organic revenue.
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2025 Adjusted Earnings Per Share Outlook: Expected to be in the range of $9.05 to $9.15.
Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Steris PLC (NYSE:STE) reported a 6% growth in total revenue for the third quarter, driven by volume and price increases.
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Gross margin improved by 90 basis points to 44.6%, indicating effective management of costs and pricing strategies.
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Adjusted earnings per diluted share increased by 11% to $2.32, showcasing strong earnings growth.
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Free cash flow for the first nine months reached $588 million, on track to meet the full-year guidance of $700 million.
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Healthcare segment saw a 7% growth in constant currency organic revenue, driven by strong recurring revenue streams and market share gains.
Negative Points
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EBIT margin decreased by 10 basis points to 23.3% due to litigation expenses and increased healthcare benefit costs.
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Healthcare capital equipment revenue declined by 5% due to shipment delays, impacting overall revenue expectations.
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Currency rate changes negatively impacted both revenue and profit, leading to a revised earnings guidance.
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Legal expenses related to the ethylene oxide trial increased significantly, adding financial pressure.
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Life Sciences Group experienced a 1% decline in constant currency organic revenue, affected by a drop in capital equipment revenue.
Q & A Highlights
Q: Can you elaborate on the delays in healthcare capital equipment orders? Are these delays specific to the third quarter, or is there a broader trend of hesitancy in capital expenditure? A: The delays are primarily due to customers not being ready to receive orders as initially planned. This is not necessarily a trend, but rather a result of a few large orders affecting the quarter. We are seeing strong order growth, indicating that spending remains robust. - Dan Carestio, President, CEO, & Director