Loading...
01/10 16:01
Loading...
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reflects strong financial performance with a 15% increase in EPS and robust free cash flow. The company anticipates 8-9% revenue growth and maintains strong growth across segments. Positive factors include increased EBIT margins and solid growth in healthcare and AST services. Despite headwinds from tariffs and inflation, the guidance remains optimistic, supported by strategic expansions and stable demand. The Q&A session reinforced management's confidence in sustained growth, though some responses lacked detail. Given these factors, a positive stock price movement is expected.
Total as-reported revenue Grew 10% year-over-year, driven by volume and 210 basis points of price.
Constant currency organic revenue Grew 9% year-over-year, driven by volume and 210 basis points of price.
Gross margin Increased 60 basis points year-over-year to 44.3%, driven by positive price and productivity, offsetting inflation and tariff costs.
EBIT margin Increased 90 basis points year-over-year to 23.1%, driven by operating expense leverage.
Adjusted effective tax rate Increased to 24.5% year-over-year, driven by changes in discrete item adjustments and geographic mix.
Net income from continuing operations $244.5 million for the quarter.
Adjusted earnings per diluted share $2.47, a 15% increase year-over-year.
Capital expenditures $180.1 million for the first half of fiscal 2026.
Depreciation and amortization $241.1 million for the first half of fiscal 2026.
Total debt $1.9 billion at the end of the quarter.
Gross to EBITDA Approximately 1.2x at quarter end.
Free cash flow $527.7 million for the first half of fiscal 2026, driven by increased earnings and improvements in working capital.
Healthcare constant currency organic revenue Grew 9% year-over-year, with service revenue growing 13%, consumables growing 10%, and capital equipment revenue growing 4%. EBIT margins increased 100 basis points to 25.1%, driven by volume, pricing, productivity, and restructuring program benefits, offsetting tariffs and inflation.
AST constant currency organic revenue Grew 7% year-over-year, with services growing 13% and offset by declines in capital equipment revenue. EBIT margins increased 250 basis points to 45.3%, driven by volume, pricing, and less capital equipment in the mix, offsetting labor and energy costs.
Life Sciences constant currency organic revenue Increased 12% year-over-year, driven by a 39% growth in capital equipment shipments, 9% growth in service revenues, and 7% growth in consumables. Margins declined 70 basis points due to tariffs and inflation.
Healthcare capital equipment revenue: Increased 4% in the quarter with a backlog of over $400 million. Orders were up 3% year-to-date but down slightly in the second quarter.
Life Sciences capital equipment revenue: Increased 39% in the quarter, with a backlog up over 50% to $114 million.
Healthcare service revenue: Grew 13% in the second quarter, continuing its streak of outperformance.
Healthcare consumables revenue: Grew 10% in the second quarter.
AST services revenue: Grew 13% in the quarter, driven by stable medical device volumes, bioprocessing demand, and currency.
Life Sciences service revenue: Grew 9% in the quarter.
Life Sciences consumables revenue: Increased 7% in the quarter.
Gross margin: Increased 60 basis points to 44.3%, driven by positive price and productivity, offsetting inflation and tariff costs.
EBIT margin: Increased 90 basis points to 23.1% of revenue, driven by operating expense leverage.
Free cash flow: Increased to $527.7 million for the first half of fiscal 2026, driven by higher earnings and working capital improvements.
Fiscal 2026 revenue growth outlook: Increased to 8%-9% as reported, with constant currency organic revenue growth expected at 7%-8%.
Earnings outlook: Raised to a range of $10.15 to $10.30 per diluted share.
Free cash flow outlook: Increased by $30 million to $850 million for fiscal 2026.
Tariffs and Inflation: Tariffs and inflation have negatively impacted margins in the Healthcare and Life Sciences segments, with a $12 million pretax tariff impact in the quarter.
Capital Equipment Revenue Declines: Anticipated declines in capital equipment revenue, particularly in the AST segment, pose a challenge to revenue growth.
Increased Tax Rate: The adjusted effective tax rate increased to 24.5%, driven by changes in discrete item adjustments and geographic mix, which could impact net earnings.
Labor and Energy Costs: Increases in labor and energy costs have been noted, particularly affecting the AST segment.
Currency Impact: Currency fluctuations have a lower favorable impact than previously anticipated, which could affect revenue growth.
Revenue Growth: The company anticipates approximately 8% to 9% as-reported revenue growth for fiscal 2026, reflecting about 100 basis points of favorable currency impact. Constant currency organic revenue growth is expected to be 7% to 8%, an increase of 100 basis points from the prior outlook.
Segment Growth: All three segments are expected to grow 7% to 8% on a constant currency organic basis for the year. AST services are projected to grow 9% to 10%, offset by anticipated declines in capital equipment.
Earnings Outlook: The company has increased its earnings outlook to a range of $10.15 to $10.30 per diluted share for fiscal 2026. EBIT margins are expected to improve by 10 to 20 basis points, partially offset by a 50 basis point increase in the anticipated effective tax rate of approximately 24%.
Free Cash Flow: The outlook for free cash flow has been increased by $30 million to $850 million for fiscal 2026. Capital expenditures remain unchanged at approximately $375 million.
The selected topic was not discussed during the call.
The earnings call reflects strong financial performance with a 15% increase in EPS and robust free cash flow. The company anticipates 8-9% revenue growth and maintains strong growth across segments. Positive factors include increased EBIT margins and solid growth in healthcare and AST services. Despite headwinds from tariffs and inflation, the guidance remains optimistic, supported by strategic expansions and stable demand. The Q&A session reinforced management's confidence in sustained growth, though some responses lacked detail. Given these factors, a positive stock price movement is expected.
The earnings call indicates strong financial performance with increased net income, free cash flow, and dividends. Despite tariff challenges, the company maintains growth expectations and reports strong order growth across segments. The Q&A reveals confidence in market positions and future prospects, with no major concerns raised by analysts. The positive sentiment is supported by organic revenue growth, margin improvements, and strategic cash management plans, suggesting a likely stock price increase in the short term.
The earnings call summary presents a mixed picture: strong growth in AST and healthcare segments, but declines in life sciences and capital equipment revenue. The Q&A highlighted optimism in bioprocessing demand but revealed management's vague responses on tariffs and future margins, creating uncertainty. Flat profit margins and expected legal expenses are concerns. Overall, the positive and negative factors offset each other, leading to a neutral sentiment.
All transcripts are sourced directly from the official live webcast or the company’s official investor relations website. We use the exact words spoken during the call with no paraphrasing of the core discussion.
Full verbatim transcripts are typically published within 4–12 hours after the call ends. Same-day availability is guaranteed for all S&P 500 and most mid-cap companies.
No material content is ever changed or summarized in the “Full Transcript” section. We only correct obvious spoken typos (e.g., “um”, “ah”, repeated 10 times”, or clear misspoken ticker symbols) and add speaker names/titles for readability. Every substantive sentence remains 100% as spoken.
When audio quality is poor or multiple speakers talk over each other, we mark the section instead of guessing. This ensures complete accuracy rather than introducing potential errors.
They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
