STERIS PLC (NYSE:STE) Exceeds Q1 2026 Earnings Expectations Despite Muted Market Reaction

Last update: Aug 6, 2025

STERIS PLC (NYSE:STE) reported fiscal first-quarter 2026 results that exceeded analyst expectations, though the market reaction has been muted in early trading. The company posted revenue of $1.39 billion, up 9% year-over-year and surpassing the consensus estimate of $1.38 billion. Adjusted earnings per share (EPS) came in at $2.34, beating expectations of $2.29.

Key Financial Highlights

Revenue Growth:
- Total revenue rose to $1.39B (vs. $1.38B expected), driven by broad-based strength across all segments.
- Constant currency organic revenue growth was 8%, reflecting sustained demand in healthcare and sterilization services.
Earnings Performance:
- Adjusted EPS of $2.34 exceeded estimates by ~2%, supported by margin improvements despite tariff pressures.
- Net income from continuing operations increased to $177.4M ($1.79 per diluted share), up from $139.8M ($1.41) in the prior-year quarter.
Segment Breakdown:
- Healthcare: Revenue grew 8% to $974.7M, with service revenue up 13%.
- Applied Sterilization Technologies (AST): Revenue increased 13% to $281.2M, with strong capital equipment demand (+46%).
- Life Sciences: Revenue rose 5% to $135.2M, led by consumables (+8%).

Market Reaction & Outlook

Despite the earnings beat, STE shares showed little movement in after-hours trading, possibly reflecting:

Tariff Headwinds: The company noted increased tariff impacts ($45M pre-tax vs. prior $30M estimate), which could weigh on future margins.
Revised Guidance:
- FY2026 revenue growth outlook raised to 8-9% (from 6-7%) due to favorable currency trends.
- Adjusted EPS guidance unchanged at $9.90–$10.15, as forex benefits offset higher costs.
- Free cash flow projections lifted to $820M (from $770M).

Analyst estimates for full-year 2026 revenue ($5.88B) and EPS ($10.15 midpoint) align closely with STERIS’s updated outlook, suggesting expectations were already priced in.

Leadership Transition

The earnings release followed news of CFO Michael Tokich’s retirement after 17 years, with Karen Burton (current CAO) succeeding him. CEO Dan Carestio emphasized a smooth transition, noting Burton’s two decades of experience at STERIS.

Conclusion

STERIS’s Q1 performance demonstrates resilience in core markets, though tariff pressures and muted after-hours trading indicate cautious optimism. Investors may focus on execution against guidance in coming quarters, particularly margin management amid cost inflation.

For detailed earnings estimates and historical performance, visit STERIS’s earnings page.

Disclaimer: This article is for informational purposes only and does not constitute investment advice.