Steris Q3 Sales Jump 50% To $1.2B, Revises FY22 Guidance

Steris plc STE reported Q3 FY22 sales of $1.2 billion, +49% Y/Y, in line with the consensus of $1.2 billion. Constant currency organic revenue increased 9%.

• Adjusted EPS of $2.12, compared with the previous year's third quarter of $1.73, beating the consensus of $1.97.
• Healthcare segment revenue grew 46% to $759.7 million, with $210.3 million added from acquisitions, reflecting an 84% increase in consumable revenue, a 47% improvement in capital equipment revenue, and a 19% increase in service revenue. 
• Applied Sterilization Technologies sales increased 23% to $216.3 million, driven primarily by increased demand from medical devices and biopharma customers.
• Life Sciences sales increased 15% to $127.9 million, with operating income increasing from $41.5 million to $52 million.
• Dental sales reached $105.1 million, slightly below the company's expectations due to lower patient volumes, supply chain constraints, and inflation.
• Free cash flow was $300.3 million.
• Outlook: Steris has updated expectations for FY22, with constant currency organic revenue growth of approximately 11%, compared with prior expectations of 10-11%. 
• Adjusted EPS of $7.85 - $7.95, compared with prior expectations of $7.60 - $7.85, above the consensus of $7.73.
• The increased outlook reflects growth across the business and higher cost synergies from the Cantel acquisition, partially offset by continued challenges from the supply chain, inflation, and earnings dilution from Renal Care business divestiture.
• Price Action: STE shares traded higher by 4.06% at $240.06 on the last check Wednesday.