Sotera maintains 2026 guidance despite Sterigenics European med device softness

 

Sotera Health beats Q3 estimates with EPS $0.29, revenue $324.9M, maintains 2026 guidance despite Sterigenics European med device softness

• Q3 revenue $325m, +4.4% YoY constant currency; adjusted EBITDA $171m, margin 52.5%.
• Adjusted EPS $0.29, up 12% YoY, helped by $5m lower interest expense.
• Sterigenics revenue $209m, +8.2% constant currency, benefiting from pricing, volume, outsourcing and X-ray.
• Nelson Labs revenue $61m, +9.2% constant currency, with EAS strength pressuring margins 19 bps.
• Nordion revenue $55m, -11.5% constant currency from harvest timing, yet margin expanded 71 bps.
• Management reaffirmed 2026 constant-currency revenue and EBITDA growth outlook; adjusted EPS guidance remains $0.95–$1.01.
• Q4 Sterigenics expected ~6% constant-currency growth with flat sequential revenue amid European med device softness.
• Company projects Nelson low-to-mid single-digit and Nordion mid-single-digit 2026 constant-currency revenue growth.
• Net leverage improved to 2.9x within 2–3x target; Moody’s upgraded rating; capex $200–$225m.
• Ongoing EO litigation remains overhang, with Georgia appeal and California trials scheduled for 2027.
• Main concern: European med device demand softness limiting Sterigenics growth and potentially signaling broader volume pressure.
• Mixed quarter, driven by strong Sterigenics and Nelson growth but Nordion decline and med device softness.

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