On Jan. 31, infection-control products maker Steris (NYSE:STE) released third-quarter earnings for the period ended Dec. 31.

  • Revenues increased by 4%, helped by growth in all three business segments but primarily as a result of a double-digit increase in global service revenues.
  • Net income from continuing operations decreased by 9.9% because of added restructuring expenses and 11% increase in the sales, general, and administrative expenses.
  • Earnings per share declined by 5.9%, mainly because of a decrease in net profit, but this loss was partially offset by a 5.1% decline in the number of outstanding shares.
  • The company expects modest revenue growth of 2%-3% to continue through the 2007 fiscal year. Earnings are expected to be in the range of $1.16 to $1.20 per share.
  • Our Motley Fool CAPS community does not have a favorable opinion of Steris; it currently rates only one out of five stars.

(Figures in millions, except per-share data)

Income Statement Highlights

Q3 2007

Q3 2006

Change

Sales

$299.0

$287.5

4.0%

Net Profit

$20.9

$23.2

(9.9%)

EPS

$0.32

$0.34

(5.9%)

Diluted Shares

65.3

68.8

(5.1%)



Get back to basics with a look at the income statement.

Margin Checkup

Q3 2007

Q3 2006

Change*

Gross Margin

42.7%

42.5%

0.2

Operating Margin

11.3%

13.6%

(2.3)

Net Margin

7.0%

8.1%

(1.1)

*Expressed in percentage points.

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets

Q3 2007

Q3 2006

Change

Cash + ST Invest.

$39.0

$44.7

(12.6%)

Accounts Rec.

$207.0

$209.5

(1.2%)

Inventory

$147.0

$122.0

20.5%



Liabilities

Q3 2007

Q3 2006

Change

Accounts Payable

$61.2

$55.8

9.7%

Long-Term Debt

$125.4

$104.7

19.8%



Learn the ways of the balance sheet.

Cash Flow Highlights

YTD 2007

YTD 2006

Change

Cash From Ops.

$41.4

$99.4

(58.4%)

Capital Expenditures

$33.1

$34.3

(3.5%)

Free Cash Flow

$8.3

$65.1

(87.2%)



Find out why Fools always follow the money.

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