On February 7, 2024, Steris PLC (STE, Financial) released its 8-K filing, announcing financial results for its fiscal 2024 third quarter ended December 31, 2023. The Ireland-domiciled medical device company, a global leader in sterilization services and infection prevention, reported a robust increase in revenue and earnings per share, driven primarily by its Healthcare segment.
Financial Performance Highlights
The company's revenue for the quarter saw a significant increase of 15% to $1.40 billion compared to $1.22 billion in the same quarter of the previous fiscal year. This growth was bolstered by a 10% rise in constant currency organic revenue. The Healthcare segment, in particular, showcased impressive growth with a 19% increase in revenue to $916.2 million, reflecting solid procedure volume growth in the United States and a reduction in backlog levels due to easing supply chain constraints.
Net income for the quarter was reported at $140.7 million, or $1.42 per diluted share, an increase from the $123.8 million, or $1.24 per diluted share, recorded in the third quarter of fiscal 2023. Adjusted net income for the quarter was $220.9 million, or $2.22 per diluted share, up from the previous year's third quarter of $202.3 million, or $2.02 per diluted share.
Segment Performance and Challenges
The Applied Sterilization Technologies (AST) segment reported a 6% increase in revenue to $234.9 million, with service revenue growing by 5% and capital equipment revenue by 42%. However, underlying service revenue growth continues to be impacted by inventory management and reduced demand from bioprocessing customers.
The Life Sciences segment also performed well, with a 21% increase in revenue to $146.6 million, driven by significant growth in capital equipment revenue. Conversely, the Dental segment experienced a 5% decline in revenue to $97.9 million, reflecting lower volume.
Cash Flow and Fiscal Outlook
Steris PLC's net cash provided by operations for the first nine months of fiscal 2024 was $718.5 million, with free cash flow reaching $457.0 million, indicating a strong financial position. The company has updated its fiscal 2024 outlook, now expecting reported revenue to increase by 10-11%, with adjusted earnings per diluted share projected to be between $8.60 and $8.70.
Management Commentary
"The continued momentum in our Healthcare segment reflects solid procedure volume growth in the United States and the easing of supply chain constraints which allowed us to continue to reduce backlog levels. In addition, revenue within our Life Sciences segment improved during the quarter," said Dan Carestio, President and Chief Executive Officer of STERIS.
Conclusion
Steris PLC's third-quarter results demonstrate the company's resilience and adaptability in a challenging market. The strong performance of the Healthcare segment, in particular, underscores the company's leadership in medical sterilization and infection prevention. With an improved fiscal outlook and solid financial metrics, Steris PLC continues to be a noteworthy player in the Medical Devices & Instruments industry.
For detailed financial figures and further information, investors are encouraged to review the full 8-K filing.
Explore the complete 8-K earnings release (here) from Steris PLC for further details.
