Revenue during the quarter grew 4.54 percent to $646.77 million from $618.69 million in the previous year period. Gross margin for the quarter expanded 133 basis points over the previous year period to 39.83 percent. Total expenses were 96 percent of quarterly revenues, up from 92.45 percent for the same period last year. That has resulted in a contraction of 355 basis points in operating margin to 4 percent.

Operating income for the quarter was $25.88 million, compared with $46.72 million in the previous year period.

However, the adjusted operating income for the quarter stood at $125.72 million compared to $107.76 million in the prior year period. At the same time, adjusted operating margin improved 202 basis points in the quarter to 19.44 percent from 17.42 percent in the last year period.

"We are encouraged to see our strategic initiatives: divest non-core assets, continue tuck-in acquisitions, and integrate Synergy Health, driving a meaningful improvement in operating margins and strong cash generation," said Walt Rosebrough, President and Chief Executive Officer of STERIS. "Our third quarter revenues were somewhat lighter than anticipated, in part due to the timing of holiday shutdowns and inventory management by our Customers, which impacted the revenue in our consumable franchises as well as in the Applied Sterilization Technologies segment. As a result of our third quarter performance and increased currency headwinds, we are modifying our outlook for fiscal 2017 to align with our performance to date. Our long-term view remains unchanged as we are committed to driving revenue growth, improving operating profit and maintaining a disciplined approach to capital allocation."

For fiscal year 2017, the company expects diluted earnings per share to be in the range of $2.39 to $2.45. The company expects diluted earnings per share to be in the range of $3.70 to $3.76 on adjusted basis.

The company has spent $42.86 million cash to meet investing activities during the nine month period as against cash outgo of $686.40 million in the last year period. It has incurred net capital expenditure of $107.44 million on net basis during the nine month period, up 31.48 percent or $25.72 million from year ago period.

The company has spent $208.59 million cash to carry out financing activities during the nine month period as against cash inflow of $653.12 million in the last year period.

Cash and cash equivalents stood at $264.86 million as on Dec. 31, 2016, up 14.48 percent or $33.50 million from $231.36 million on Dec. 31, 2015.

Working capital increases marginally
STERIS plc has recorded an increase in the working capital over the last year. It stood at $620.29 million as at Dec. 31, 2016, up 2.40 percent or $14.55 million from $605.74 million on Dec. 31, 2015. Current ratio was at 2.77 as on Dec. 31, 2016, up from 2.68 on Dec. 31, 2015.

Cash conversion cycle (CCC) has decreased to 42 days for the quarter from 44 days for the last year period. Days sales outstanding went down to 32 days for the quarter compared with 33 days for the same period last year.

Days inventory outstanding was almost stable at 25 days for the quarter, when compared with the last year period. At the same time, days payable outstanding was almost stable at 14 days for the quarter, when compared with the previous year period.