Steris STE Q2 2027: Life Sciences surge drives guidance raise

Steris posted adjusted earnings per share of $2.94 for its fiscal second quarter, clearing the consensus estimate of roughly $2.68 by about 9.83%. Revenue came in at $1.59 billion, also ahead of the $1.56 billion estimate, growing about 8.8% from the year-ago period.

The standout was the Life Sciences segment, where capital equipment revenue surged 53%, lifting the segment's total revenue to $170.6 million, a gain of nearly 18% year over year. Healthcare, the company's largest segment, contributed $1.12 billion in revenue, up 8.6%, with both service and consumables each growing 10%.

Management responded to the strong quarter by raising its full-year adjusted EPS guidance to a range of $11.35 to $11.55, up from the prior range of $11.10 to $11.30. About $0.18 of that raised midpoint reflects tariff refunds tied to levies previously paid under the International Emergency Economic Powers Act, so the underlying operational raise is somewhat smaller than the headline figures suggest. Life Sciences full-year organic growth expectations were also lifted to 9-10% from 6-7%, while consolidated revenue growth guidance remained unchanged at 7-8%.

On the risk side, Applied Sterilization Technologies saw its capital equipment revenue fall 21%, and its full-year organic growth outlook was trimmed to 6-7% from 7-8%. Life Sciences backlog also declined to $93.4 million from $113.7 million, a figure worth watching as it reflects the pace at which that capital equipment surge draws down future order coverage. Gross tariff costs of $15 million per quarter and trade policy uncertainty remain ongoing headwinds.

CEO Dan Carestio said Life Sciences delivered particularly strong performance, giving management confidence to raise segment expectations, and that fiscal 2027 is shaping up to be another record year for STERIS, supported by solid underlying demand and excellent execution from commercial teams. The company also noted a proposed acquisition of Xodus Medical, with a revised full-year outlook incorporating that deal to be provided after closing.