Sotera Health tops Q3 profit estimates, trims 2026 dollar outlook

Sotera Health (SHC) said on Nov. 3 that its adjusted earnings reached 29 cents per diluted share in the third quarter of 2026, topping the 27-cent consensus estimate compiled by Finnhub. Revenue of $324.89 million was in line with the $322.97 million consensus estimate compiled by Finnhub.

Sotera Health sells sterilization solutions, lab testing and advisory services to the healthcare industry. It operates through three businesses: Sterigenics, Nordion and Nelson Labs.

Net revenues increased 4.4% on both an as-reported and constant currency basis, compared with the third quarter of 2025, according to the company’s press release.

Here’s how the company did:

• Adjusted EPS: 29 cents vs. 26 cents a year earlier, against 27 cents expected, according to Finnhub
• Revenue: $324.89 million vs. $311.31 million a year earlier, in line with the $322.97 million consensus estimate compiled by Finnhub
• Net income: $58.39 million vs. $48.40 million a year earlier
• Diluted EPS: 20 cents vs. 17 cents a year earlier

Adjusted EBITDA rose 3.9% to $170.67 million, or 4.0% on a constant currency basis. Adjusted EBITDA margin was 52.5%.

Chief Executive Officer Alton Shader said, “We are pleased with our third-quarter performance, which included solid top- and bottom-line constant currency growth, along with nearly 100 basis points of sequential Adjusted EBITDA margin expansion.” He added that the company’s performance was supported by constant currency revenue growth of 8.2% at Sterigenics and 9.2% at Nelson Labs.

2026 guidance

The company reaffirmed its 2026 constant currency outlook for net revenues growth of 5.25% to 6.75% and Adjusted EBITDA growth of 5.75% to 7.25%.

In dollar terms, the company lowered both ranges. It now expects net revenues of $1.233 billion to $1.250 billion, down from the $1.236 billion to $1.254 billion range it gave on Aug. 6. Adjusted EBITDA is now expected at $632 million to $641 million, down from $634 million to $643 million.

The company said the foreign currency benefit to net revenues and Adjusted EBITDA has been revised to 70 basis points from 100 basis points in its previous outlook. Its Adjusted EPS range of $0.95 to $1.01 is unchanged, and it narrowed its interest expense forecast to $137 million to $140 million.

Segment results

Sterigenics net revenues rose 8.5% to $209 million, or 8.2% on a constant currency basis. Segment income increased 9.6% to $117 million.

Nordion net revenues fell 12.4% to $55 million, or 11.5% on a constant currency basis, due to the expected timing of Co-60 harvest schedules. Segment income decreased 11.4% to $34 million.

Nelson Labs net revenues rose 8.8% to $61 million, or 9.2% on a constant currency basis. Segment income increased 2.5% to $19 million.

Balance sheet and cash

As of Sept. 30, the company had $2.2 billion of total debt and $412 million in unrestricted cash and cash equivalents. Its Net Leverage Ratio improved to 2.9x from 3.2x as of Dec. 31, 2025, within its long-term goal of 2.0x to 3.0x.

Net cash provided by operating activities was $111 million in the quarter. Moody’s Ratings upgraded the company’s credit rating in early October.