On August 6, 2024, Steris PLC (STE, Financial) released its 8-K filing for the first quarter of fiscal 2025, ending June 30, 2024. The Ireland-domiciled medical technology company, known for its sterilization services and infection prevention solutions, reported an 8% increase in total revenue from continuing operations, reaching $1.3 billion compared to $1.2 billion in the same quarter last year. Constant currency organic revenue grew by 6%.
Company Overview
Steris PLC (STE, Financial) is a global leader in contract sterilization services, ensuring the safe delivery of single-use and implantable medical equipment to hospitals worldwide. The company also provides sterilizers, washer-disinfectors, and other decontamination equipment for healthcare and biopharma manufacturing sites. Approximately 70% of its revenue comes from Healthcare Services, 19% from Applied Sterilization Technologies (AST), and 11% from Life Sciences services.
Performance and Challenges
For the first quarter of fiscal 2025, Steris PLC (STE, Financial) reported net income of $139.9 million or $1.41 per share, aligning with analyst estimates. Adjusted EPS was $2.03, up from $1.84 in the same period last year. The company's Healthcare segment saw a 10% revenue increase to $901.2 million, driven by a 23% rise in consumable revenue and a 14% growth in service revenue, despite a 10% decline in capital equipment revenue. However, the Life Sciences segment faced a 2% revenue decline to $128.5 million, primarily due to the divestiture of the CECS business.
Financial Achievements
Steris PLC (STE, Financial) achieved significant financial milestones this quarter. The Healthcare segment's operating income rose to $216.9 million from $198.2 million, attributed to increased volume and favorable pricing. The AST segment reported a 7% revenue increase to $249.8 million, with an 8% rise in constant currency organic revenue. Operating income for AST was $117.7 million, up from $109.6 million last year. Despite challenges in the Life Sciences segment, operating income improved to $52.6 million from $49.8 million, reflecting better pricing and a favorable mix.
Key Financial Metrics
| Metric | Q1 FY2025 | Q1 FY2024 |
|---|---|---|
| Total Revenue | $1.3 billion | $1.2 billion |
| Net Income | $139.9 million | $130.6 million |
| EPS | $1.41 | $1.31 |
| Adjusted EPS | $2.03 | $1.84 |
| Free Cash Flow | $195.7 million | $214.5 million |
Analysis and Outlook
Steris PLC (STE, Financial) has demonstrated robust performance in its Healthcare and AST segments, which are crucial for its growth in the Medical Devices & Instruments industry. The company's ability to increase revenue and operating income in these segments highlights its strong market position and operational efficiency. However, the decline in the Life Sciences segment due to divestitures poses a challenge that the company needs to address.
Looking ahead, Steris PLC (STE, Financial) has reiterated its fiscal 2025 outlook, expecting a 6.5-7.5% increase in reported revenue from continuing operations and adjusted EPS in the range of $9.05 to $9.25. The company's focus on innovation and strategic acquisitions will be key drivers for sustaining growth and overcoming industry challenges.
Explore the complete 8-K earnings release (here) from Steris PLC for further details.
