STERIS (STE) Q1 Earnings Beat Estimates, Operating Margin Falls

Core Viewpoint - STERIS plc reported better-than-expected first-quarter fiscal 2025 results, with adjusted earnings and revenues surpassing consensus estimates, driven by strong performance in the Healthcare segment and improvements in the AST segment [10][11]. Financial Performance - Adjusted EPS for the first quarter was $2.03, a 10.3% increase year-over-year, exceeding the Zacks Consensus Estimate by 2 cents [1] - GAAP EPS was$ 1.41, up 7.6% from $1.31 in the prior year [1] - Revenues from continuing operations reached$ 1.28 billion, an 8.5% year-over-year increase, surpassing the Zacks Consensus Estimate by 1.5% [2] Revenue Breakdown - Healthcare segment revenues rose 10% year-over-year to $901.2 million, with consumable revenues up 23% and service revenues up 14%, although capital equipment revenues declined by 10% [3] - AST segment revenues improved 7% to$ 249.8 million, driven by a 24% increase in capital equipment revenues and 7% growth in service revenues [4] - Life Sciences segment revenues decreased 2% to $128.5 million, impacted by the divestiture of the CECS business, despite a 13% growth in consumable revenues [5] Margins and Expenses - Gross profit was$ 572.4 million, an 8.2% increase year-over-year, with a gross margin of 44.7%, reflecting a slight expansion of 4 basis points [6] - Selling, general and administrative expenses rose 9.5% to $335.6 million, while research and development expenses increased 3.6% to$ 25.6 million [7] Cash Flow and Guidance - Cash and cash equivalents at the end of the first quarter were $198.3 million, down from$ 207 million at the end of fiscal 2024 [8] - Cumulative net cash flow from operating activities was $303.7 million, compared to$ 123.8 million in the prior year [8] - The company expects revenues to grow by 6.5-7.5% and adjusted EPS to be in the range of $9.05-$ 9.25 for fiscal 2025 [9]