Q2 2026 STERIS plc Earnings Call Transcript
Key Points
- Steris PLC (STE) reported a 10% growth in total as-reported revenue for the second quarter, with constant currency organic revenue growing by 9%.
- The company's gross margin increased by 60 basis points to 44.3%, driven by positive pricing and productivity.
- Adjusted earnings per diluted share from continuing operations rose by 15% to $2.47.
- Free cash flow for the first half of fiscal 2026 was strong at $527.7 million, driven by increased earnings and improvements in working capital.
- The company increased its fiscal 2026 outlook, anticipating 8% to 9% as-reported revenue growth and raising its earnings outlook to a range of $10.15 to $10.30 per share.
- The adjusted effective tax rate increased to 24.5%, driven by changes in discrete item adjustments and geographic mix.
- Tariffs and inflation, particularly in labor and materials, posed significant headwinds, impacting margins by 90 and 130 basis points respectively.
- Healthcare capital equipment revenue growth was modest at 4%, with a slight decline in orders during the second quarter.
- Life Sciences segment margins declined by 70 basis points due to tariffs and inflation, despite a 12% increase in constant currency organic revenue.
- The AST segment faced anticipated declines in capital equipment revenue, offsetting some of the growth in services.
Hello, and thank you for standing by. My name is Bella, and I will be your conference operator today. At this time, I would like to welcome everyone to STERIS plc 2Q fiscal 2026 earnings conference call. (Operator Instructions)
I would now like to turn the conference over to Julie Winter, Vice President of Investor Relations. You may begin.
Thank you, Bella, and good morning, everyone. Speaking on today's call this morning will be Karen Burton, Senior Vice President and CFO; and Dan Carestio, our President and CEO. And I do have a few words of caution before we open for comments.
This webcast contains time-sensitive information that is accurate only as of today. Any redistribution, retransmission or rebroadcast of this call without the express written consent of STERIS is strictly prohibited.
Some of the statements made during this review are or may be considered forward-looking statements. Many important factors could cause actual results to differ materially from those in the forward
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