Latest news with #Nordion
Yahoo
09-08-2025
- Business
- Yahoo
Sotera Health Co (SHC) Q2 2025 Earnings Call Highlights: Strong Revenue Growth and Raised Outlook
Revenue: Increased by 6.4% to $294 million in Q2 2025. Adjusted EBITDA: Grew by 9.8% to $151 million, with margins at 51.2%. Net Income: $8 million or $0.03 per diluted share for Q2 2025. Adjusted EPS: Improved to $0.20, up $0.01 from Q2 2024. Sterigenics Revenue: Increased by 10.5% to $195 million. Nordion Revenue: Increased by 2.9% to $42 million. Nelson Labs Revenue: Declined by 3.3% to $57 million. Operating Cash Flow: Approximately $57 million in Q2 2025. Capital Expenditures: Totaled approximately $31 million in the quarter. Net Leverage Ratio: Improved to 3.5 times from 3.7 times at the end of 2024. 2025 Revenue Growth Outlook: Raised to 4.5% to 6%. 2025 Adjusted EBITDA Growth Outlook: Increased to 6% to 7.5%. 2025 Adjusted EPS Outlook: Raised to $0.75 to $0.82. 2025 Capital Expenditures Outlook: Revised to $170 million to $180 million. Warning! GuruFocus has detected 3 Warning Sign with SHC. Release Date: August 08, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Sotera Health Co (NASDAQ:SHC) reported a strong second quarter with a 6.4% increase in revenue and a 9.8% growth in adjusted EBITDA. Sterigenics experienced a 10.5% year-over-year revenue growth, driven by increased customer demand and successful facility expansion. Nordion exceeded revenue expectations due to the timing of Cobalt-60 shipments, contributing positively to the quarter's performance. Nelson Labs achieved a 514 basis points expansion in segment income margin, marking the fourth consecutive quarter of year-over-year margin improvement. The company raised its 2025 revenue growth outlook to 4.5% to 6% and adjusted EBITDA growth outlook to 6% to 7.5%, reflecting improved performance expectations. Negative Points Nelson Labs experienced a 3.3% decline in revenue compared to Q2 2024, primarily due to the anticipated impact from expert advisory services. Nordion's segment income margin decreased by 145 basis points due to the timing of supplier mix, despite an increase in revenue. The company is facing increased maintenance-related downtime in the second half of the year, which may affect growth. There is a potential risk associated with Russian-supplied Cobalt-60, although it has improved to less than 0.5% of total company 2025 revenue. The effective tax rate is projected to be relatively high, in the range of 31.5% to 33.5%, despite recent favorable changes in US tax law. Q & A Highlights Q: Did Sotera Health see any pull-forward dynamics in Sterigenics due to tariff concerns? A: Michael Petras, CEO, stated that there were no significant pull-forward dynamics related to tariffs. The volume increase was anticipated and aligned with their expectations for the year. Q: Can you elaborate on the recovery in med tech and bioprocessing volumes? A: Michael Petras, CEO, explained that both med tech and bioprocessing showed strong performance. Bioprocessing, although a smaller part of the business, saw significant growth, supported by recent capacity expansions. Med tech volumes were steady, with growth across multiple categories. Q: What were the drivers behind the margin improvement at Nelson Labs? A: Michael Petras, CEO, attributed the margin improvement to labor productivity, favorable mix shifts from expert advisory services to core lab testing, and a 3% price increase. This marks the fourth consecutive quarter of margin expansion. Q: How does the extension of the EPA's updated ETO regulations impact Sotera Health's investments? A: Michael Petras, CEO, stated that the extension allows for optimal installation and validation of emissions controls. The company will continue to invest in compliance and sees this as an opportunity to optimize costs. Q: What is the outlook for Sterigenics' volume and mix growth in the second half of the year? A: Jonathan Lyons, CFO, indicated that while the first half saw strong growth, the second half might see slightly muted growth due to increased maintenance-related downtime. However, the overall trajectory remains positive. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus.
Yahoo
09-08-2025
- Business
- Yahoo
Sotera Health Co (SHC) Q2 2025 Earnings Call Highlights: Strong Revenue Growth and Raised Outlook
Revenue: Increased by 6.4% to $294 million in Q2 2025. Adjusted EBITDA: Grew by 9.8% to $151 million, with margins at 51.2%. Net Income: $8 million or $0.03 per diluted share for Q2 2025. Adjusted EPS: Improved to $0.20, up $0.01 from Q2 2024. Sterigenics Revenue: Increased by 10.5% to $195 million. Nordion Revenue: Increased by 2.9% to $42 million. Nelson Labs Revenue: Declined by 3.3% to $57 million. Operating Cash Flow: Approximately $57 million in Q2 2025. Capital Expenditures: Totaled approximately $31 million in the quarter. Net Leverage Ratio: Improved to 3.5 times from 3.7 times at the end of 2024. 2025 Revenue Growth Outlook: Raised to 4.5% to 6%. 2025 Adjusted EBITDA Growth Outlook: Increased to 6% to 7.5%. 2025 Adjusted EPS Outlook: Raised to $0.75 to $0.82. 2025 Capital Expenditures Outlook: Revised to $170 million to $180 million. Warning! GuruFocus has detected 3 Warning Sign with SHC. Release Date: August 08, 2025 For the complete transcript of the earnings call, please refer to the full earnings call transcript. Positive Points Sotera Health Co (NASDAQ:SHC) reported a strong second quarter with a 6.4% increase in revenue and a 9.8% growth in adjusted EBITDA. Sterigenics experienced a 10.5% year-over-year revenue growth, driven by increased customer demand and successful facility expansion. Nordion exceeded revenue expectations due to the timing of Cobalt-60 shipments, contributing positively to the quarter's performance. Nelson Labs achieved a 514 basis points expansion in segment income margin, marking the fourth consecutive quarter of year-over-year margin improvement. The company raised its 2025 revenue growth outlook to 4.5% to 6% and adjusted EBITDA growth outlook to 6% to 7.5%, reflecting improved performance expectations. Negative Points Nelson Labs experienced a 3.3% decline in revenue compared to Q2 2024, primarily due to the anticipated impact from expert advisory services. Nordion's segment income margin decreased by 145 basis points due to the timing of supplier mix, despite an increase in revenue. The company is facing increased maintenance-related downtime in the second half of the year, which may affect growth. There is a potential risk associated with Russian-supplied Cobalt-60, although it has improved to less than 0.5% of total company 2025 revenue. The effective tax rate is projected to be relatively high, in the range of 31.5% to 33.5%, despite recent favorable changes in US tax law. Q & A Highlights Q: Did Sotera Health see any pull-forward dynamics in Sterigenics due to tariff concerns? A: Michael Petras, CEO, stated that there were no significant pull-forward dynamics related to tariffs. The volume increase was anticipated and aligned with their expectations for the year. Q: Can you elaborate on the recovery in med tech and bioprocessing volumes? A: Michael Petras, CEO, explained that both med tech and bioprocessing showed strong performance. Bioprocessing, although a smaller part of the business, saw significant growth, supported by recent capacity expansions. Med tech volumes were steady, with growth across multiple categories. Q: What were the drivers behind the margin improvement at Nelson Labs? A: Michael Petras, CEO, attributed the margin improvement to labor productivity, favorable mix shifts from expert advisory services to core lab testing, and a 3% price increase. This marks the fourth consecutive quarter of margin expansion. Q: How does the extension of the EPA's updated ETO regulations impact Sotera Health's investments? A: Michael Petras, CEO, stated that the extension allows for optimal installation and validation of emissions controls. The company will continue to invest in compliance and sees this as an opportunity to optimize costs. Q: What is the outlook for Sterigenics' volume and mix growth in the second half of the year? A: Jonathan Lyons, CFO, indicated that while the first half saw strong growth, the second half might see slightly muted growth due to increased maintenance-related downtime. However, the overall trajectory remains positive. For the complete transcript of the earnings call, please refer to the full earnings call transcript. This article first appeared on GuruFocus. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
26-06-2025
- Business
- Yahoo
Sotera Health Company's Q1 Earnings Call: Our Top 5 Analyst Questions
Sotera Health's first quarter results were well received by the market, as the company's revenue and non-GAAP profit surpassed Wall Street's expectations. Management credited this performance to stable demand across its sterilization and lab testing services, with Sterigenics benefiting from favorable pricing and steady volume trends. CEO Michael Petras highlighted the company's ability to deliver 'mid-single digit top-line growth and double-digit bottom line growth on a constant currency basis,' while also noting strong customer relationships and operational execution as contributing factors. Notably, the Nordion segment saw higher-than-anticipated revenue due to a shift in the timing of Cobalt-60 shipments, though this is expected to balance out over the coming quarters. Is now the time to buy SHC? Find out in our full research report (it's free). Revenue: $254.5 million vs analyst estimates of $246.9 million (2.6% year-on-year growth, 3.1% beat) Adjusted EPS: $0.14 vs analyst estimates of $0.12 (14.9% beat) Adjusted EBITDA: $121.8 million vs analyst estimates of $113.6 million (47.9% margin, 7.2% beat) Management reiterated its full-year Adjusted EPS guidance of $0.73 at the midpoint Operating Margin: 22.4%, in line with the same quarter last year Organic Revenue rose 3.5% year on year (12.1% in the same quarter last year) Market Capitalization: $3.16 billion While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention. Patrick Donnelly (Citi) asked about the potential impact of tariffs and the company's confidence in navigating them. CEO Michael Petras replied that current tariff policies are not expected to materially affect operations, with most revenue shielded by service-based business and trade agreements. Brett Fishbin (KeyBanc) inquired about drivers of Nelson Labs' margin improvement and future trajectory. CFO Jonathan Lyons explained that stable labor, lab optimization, and regulatory-driven volume growth have supported margin gains, with continued progress expected. Matt Sykes (Goldman Sachs) questioned the legal risk strategy and cross-selling between Nelson Labs and Sterigenics. CEO Michael Petras emphasized confidence in defending legal claims and pointed to ongoing incentives and integration efforts to deepen cross-segment customer relationships. Luke Sergott (Barclays) sought clarification on margin sustainability, particularly after the Nordion shipment timing shift. CEO Michael Petras stated that margin improvement will be primarily sustained by Nelson Labs, with other segments remaining stable. Jason Bednar (Piper Sandler) asked about pricing stability in Sterigenics and potential customer pushback. CEO Michael Petras confirmed that price levels are defensible and consistent with long-term targets, with ongoing discussions reflecting the value delivered to customers. In future quarters, the StockStory team will pay close attention to (1) the pace of volume recovery in Sterigenics and the sustainability of recent pricing gains, (2) whether Nelson Labs can maintain its margin expansion amid regulatory changes and advisory service headwinds, and (3) the normalization of Nordion's revenue as shipment timing effects subside. Ongoing litigation outcomes and any regulatory developments related to ethylene oxide emissions will also be important markers to watch. Sotera Health Company currently trades at $10.85, down from $11.49 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it's free). Donald Trump's victory in the 2024 U.S. Presidential Election sent major indices to all-time highs, but stocks have retraced as investors debate the health of the economy and the potential impact of tariffs. While this leaves much uncertainty around 2025, a few companies are poised for long-term gains regardless of the political or macroeconomic climate, like our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
Yahoo
15-05-2025
- Business
- Yahoo
SHC Q1 Earnings Call: Sotera Health Outperforms Expectations, Highlights Resilient Service Demand
Healthcare services company Sotera Health (NASDAQ:) beat Wall Street's revenue expectations in Q1 CY2025, with sales up 2.6% year on year to $254.5 million. Its non-GAAP profit of $0.14 per share was 14.9% above analysts' consensus estimates. Is now the time to buy SHC? Find out in our full research report (it's free). Revenue: $254.5 million vs analyst estimates of $246.9 million (2.6% year-on-year growth, 3.1% beat) Adjusted EPS: $0.14 vs analyst estimates of $0.12 (14.9% beat) Adjusted EBITDA: $121.8 million vs analyst estimates of $113.6 million (47.9% margin, 7.2% beat) Management reiterated its full-year Adjusted EPS guidance of $0.73 at the midpoint Operating Margin: 22.4%, in line with the same quarter last year Free Cash Flow was $35.6 million, up from -$25.19 million in the same quarter last year Organic Revenue rose 3.5% year on year (12.1% in the same quarter last year) Market Capitalization: $3.64 billion Sotera Health's first quarter results reflected steady demand across its sterilization and lab testing businesses, with management emphasizing improvement in core service volumes and margin expansion. CEO Michael Petras attributed the quarter's performance to higher pricing within Sterigenics, positive volume trends in Nelson Labs, and a one-time revenue shift in Nordion. Petras also pointed to the company's ability to capture share in regulated end markets, such as bioprocessing, as a source of advantage. Looking ahead, management reaffirmed its full-year guidance and stressed confidence in the company's exposure to stable, service-based revenue streams. CFO Jon Lyons highlighted ongoing margin initiatives at Nelson Labs and reiterated that tariffs and foreign exchange are expected to have minimal impact. Petras added, 'We are optimistic based on what we are seeing here, even at the early stages of the second quarter,' citing positive customer feedback and improving order trends in key segments. Management provided insight into the operational levers driving the quarter's performance and offered clarity on segment dynamics, risk factors, and customer trends impacting results. Sterigenics pricing and volume: Revenue growth was primarily driven by higher pricing and gradual volume recovery, with management noting that underlying customer demand is stabilizing and bioprocessing volumes are improving, albeit from a small base. Nordion shipment timing: The segment benefited from early Cobalt-60 shipments originally scheduled for the second quarter, temporarily boosting revenue and margin but not altering the full-year outlook for the business. Nelson Labs margin expansion: Margin improvement at Nelson Labs was supported by increased core lab testing volumes, better mix, and stable labor costs, as well as optimization efforts in response to regulatory-driven demand for testing. Limited tariff exposure: Management stated that current tariff policies are not expected to materially affect Sotera Health, since most revenue is generated from services and Cobalt-60 imports from Canada are exempt under existing trade agreements. Ongoing litigation and regulatory compliance: The company continues to defend itself in ethylene oxide (EO) litigation and is investing in regulatory compliance, particularly with evolving EPA rules. Management is confident in its operational safety but acknowledges ongoing legal costs. Management expects stable demand for sterilization and lab services in 2025, supported by regulated healthcare markets and ongoing operational efficiency initiatives. Service-based revenue resilience: The company's reliance on recurring service revenue, which makes up about 85% of sales, underpins management's confidence in navigating industry and regulatory shifts without significant disruption. Margin improvement focus: Initiatives in lab optimization and cost control, particularly at Nelson Labs, are expected to support ongoing adjusted EBITDA margin expansion throughout the year. Regulatory and legal environment: While management sees minimal risk from current tariffs and stable supply for key products, regulatory changes and litigation in EO remain watch points that could influence long-term profitability. Patrick Donnelly (Citi): Asked about tariff effects and Sterigenics volume recovery; management reiterated minimal tariff impact and noted improving volumes, especially in bioprocessing. Brett Fishbin (KeyBanc): Inquired about Nelson Labs' margin drivers and future trajectory; management pointed to regulatory-driven demand, stable labor, and successful optimization initiatives. Matt Sykes (Goldman Sachs): Sought an update on EO litigation risk and cross-selling efforts; management emphasized ongoing legal defense and described continued progress in cross-selling between Sterigenics and Nelson Labs. Luke Sergott (Barclays): Queried about the impact of shipment timing on Nordion's margins and expectations for Sterigenics' volume trends; management clarified that shipment timing was a temporary factor and volumes are expected to improve. Jason Bednar (Piper Sandler): Asked about Sterigenics pricing stability and customer responses to price increases; management indicated price levels are defensible and ongoing contract negotiations are balancing value delivery with customer cost pressures. In the coming quarters, the StockStory team will monitor (1) sustained volume recovery in Sterigenics, particularly as customer inventory and device utilization trends normalize; (2) Nelson Labs' ability to maintain margin gains through continued optimization and regulatory-driven testing demand; and (3) the progression of EO litigation and any regulatory changes impacting operational costs. The stability of service revenue and execution on cross-segment growth opportunities will also be key markers of Sotera Health's strategic progress. Sotera Health Company currently trades at a forward P/E ratio of 16.8×. Should you load up, cash out, or stay put? Find out in our free research report. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today.
