How did STERIS perform in the fiscal 2025 second quarter?

Total revenue from continuing operations rose 7% to $1.33 billion, and constant currency organic revenue also grew 7%. As-reported diluted EPS from continuing operations was $1.51, up from $1.20, and adjusted diluted EPS was $2.14, up from $1.86.

Which segment drove the quarter's results?

Healthcare was the main driver, with revenue up 9% to $944.2 million and operating income rising to $228.0 million from $204.1 million, reflecting improved volume, price and productivity. Consumable revenue grew 12% and service revenue grew 14%, while capital equipment revenue declined 2%.

Why did AST segment operating income decline despite higher revenue?

AST revenue increased 9% to $256.7 million, but segment operating income fell to $109.9 million from $110.8 million. The filing attributes the decline, among other things, to increased labor and energy costs and a loss incurred on a large capital equipment sale.

How did the Life Sciences divestiture affect results?

Life Sciences reported revenue down 4% to $127.9 million because of the April 1, 2024 divestiture of the CECS business, which was primarily service revenue. Constant currency organic revenue still rose 3%, and operating income increased to $53.7 million from $50.3 million on improved price and favorable mix.

STE 8-K: Earnings & Results

01—Abstract

Summary

Summary of the 8-K filed November 6, 2024. Cited figures are marked; the original filing is the authoritative source.

STERIS plc (NYSE: STE) filed a Form 8-K on November 6, 2024 furnishing Exhibit 99.1, a press release announcing financial results for its fiscal 2025 second quarter ended September 30, 2024.

Total revenue from continuing operations rose 7% to $1.33 billion^a ($1,328,912 thousand) from $1.24 billion a year earlier, and constant currency organic revenue from continuing operations also grew 7%. As-reported diluted EPS from continuing operations was $1.51 versus $1.20, and adjusted diluted EPS was $2.14 versus $1.86. Healthcare, the largest segment, grew revenue 9% to $944.2 million with operating income of $228.0 million, while Applied Sterilization Technologies (AST) revenue rose 9% to $256.7 million but its segment operating income slipped to $109.9 million from $110.8 million, citing higher labor and energy costs and a loss on a large capital equipment sale.

Life Sciences revenue fell 4% to $127.9 million^b, reflecting the April 1, 2024 divestiture of the CECS business, though constant currency organic revenue rose 3%. Balance sheet and cash flow changes were significant over the period. Net cash from operations for the first half of fiscal 2025 was $554.5 million, and free cash flow was $344.5 million, up from $284.7 million.

Long-term indebtedness fell to $2.16 billion^c at September 30, 2024 from $3.12 billion at March 31, 2024, following $809.9 million of proceeds from sale of businesses and $638.1 million of term loan payments. Management reiterated its full-year fiscal 2025 outlook: as-reported revenue growth of 6.5-7.5%, constant currency organic revenue growth of 6-7%, adjusted EPS from continuing operations of $9.05 to $9.25, capital expenditures of about $360 million, and free cash flow of about $700 million.

02—Key points

Key Highlights

Q2 fiscal 2025 total revenue from continuing operations increased 7% to $1,328.9 million; constant currency organic revenue grew 7%.
As-reported diluted EPS from continuing operations was $1.51 versus $1.20; adjusted diluted EPS was $2.14 versus $1.86.
Healthcare revenue rose 9% to $944.2 million with operating income of $228.0 million, up from $204.1 million.
AST segment revenue increased 9% to $256.7 million, but segment operating income declined to $109.9 million from $110.8 million due to higher labor and energy costs and a loss on a large capital equipment sale.
Life Sciences revenue decreased 4% to $127.9 million due to the CECS divestiture, while operating income rose to $53.7 million from $50.3 million.
First-half fiscal 2025 free cash flow was $344.5 million versus $284.7 million, and long-term indebtedness fell to $2,156.2 million from $3,120.2 million at March 31, 2024.
Fiscal 2025 outlook was reiterated, including adjusted EPS of $9.05 to $9.25 and free cash flow of approximately $700 million.

03—Questions

Frequently Asked Questions

How did STERIS perform in the fiscal 2025 second quarter?
Total revenue from continuing operations rose 7% to $1.33 billion, and constant currency organic revenue also grew 7%. As-reported diluted EPS from continuing operations was $1.51, up from $1.20, and adjusted diluted EPS was $2.14, up from $1.86.
Which segment drove the quarter's results?
Healthcare was the main driver, with revenue up 9% to $944.2 million and operating income rising to $228.0 million from $204.1 million, reflecting improved volume, price and productivity. Consumable revenue grew 12% and service revenue grew 14%, while capital equipment revenue declined 2%.
Why did AST segment operating income decline despite higher revenue?
AST revenue increased 9% to $256.7 million, but segment operating income fell to $109.9 million from $110.8 million. The filing attributes the decline, among other things, to increased labor and energy costs and a loss incurred on a large capital equipment sale.
How did the Life Sciences divestiture affect results?
Life Sciences reported revenue down 4% to $127.9 million because of the April 1, 2024 divestiture of the CECS business, which was primarily service revenue. Constant currency organic revenue still rose 3%, and operating income increased to $53.7 million from $50.3 million on improved price and favorable mix.
Is STERIS changing its fiscal 2025 guidance?
No. The company reiterated its fiscal 2025 outlook: as-reported revenue growth of 6.5-7.5%, constant currency organic revenue growth of 6-7%, adjusted EPS from continuing operations of $9.05 to $9.25, capital expenditures of about $360 million, and free cash flow of about $700 million.

04—Continue

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