logo
Share SHARE
FONT-SIZE Plus   Neg

Varian Medical Q1 Profit Rises, Guides Q2 EPS Below View

Varian Medical Systems Inc. (VAR) Wednesday reported higher profit for the first quarter as revenue increased 8 percent with improvements in both segments. However, earnings per share were less than what analysts had expected. The company guided second-quarter profit below Street view and raised the lower end of its full year profit outlook. The stock fell over 4 percent in after-hours trading.

Dow Wilson, CEO, said, ''The company's first quarter revenues and net earnings grew in line with our expectations for both our Oncology Systems and X-Ray Products businesses. Margins were also in line with our expectations. Excluding the restructuring charge in the quarter, our operating margin improved versus the year-ago quarter.''

Net income climbed to $95.3 million or $0.86 per share from $90.2 million or $0.79 per share in the year-ago quarter.

The latest results included a $4.1 million restructuring charge related to an enhanced retirement program.

On average, 14 analysts polled by Thomson Reuters expected the company to earn $0.87 per share for the quarter. Analysts' estimates typically exclude special items.

Gross margin dropped to 42.9 percent from 43.0 percent.

Revenues rose 8 percent to $678.4 million from $625.3 million. Analysts had a consensus revenue estimate of $676.14 million for the quarter.

Revenue from Oncology Systems increased 8 percent to $524.3 million, and X-Ray Products revenue increased 18 percent to $132.9 million.

Net orders climbed to $619.2 million from $606.1 million in the prior year, as a small decline in Oncology Systems, due to weaker orders in Europe and Asia, was offset by increased orders at X-Ray Products.

Looking forward to the second quarter, net earnings per share are estimated in the range of $0.98 to $1.03 with the balance of restructuring charges from the enhanced retirement program. The company expects revenues to increase 5 to 6 percent year-over-year.

Analysts currently expect the company to earn $1.04 per share on revenue of $774.26 million for the second quarter.

For fiscal year 2013, the company continues to believe that revenues could increase 8 to 9 percent. Net earnings per share for fiscal 2013 could be in the range of $4.08 to $4.16. Previously, the company expected fiscal 2013 earnings to be in the range of $4.06 to $4.16 per share.

Analysts currently expect the company to earn $4.12 per share on revenue of $3.04 billion for the fiscal year 2013.

VAR closed down 0.3 percent on Wednesday at $74.91, and fell 4.2 percent in the extended trade.

by RTT Staff Writer

For comments and feedback: editorial@rttnews.com

Business News

Editors Pick
Lab equipment maker Thermo Fisher Scientific Inc. has agreed to acquire electron microscope maker FEI Co. for about $4.2 billion in cash, the two companies said Friday. Thermo Fisher noted that FEI's electron microscopy platform will complement its own mass spectrometry systems to accelerate advancements in structural biology. While reporting a wider loss for the first quarter, Sears Holdings Corp. said it has decided to "aggressively evaluate" all potential alternatives for its top brands - Kenmore, Craftsman and DieHard or KCD, and the Sears Home Services or SHS businesses. Sears has retained Citigroup Global Markets and LionTree Advisors to assist in its efforts. Philips Lighting, the splinter group of Dutch consumer electronics giant Philips, saw its shares rally around 8.50 percent on its debut on Friday at the Amsterdam stock exchange. The shares are currently at 21.70 euros, above its set pricing of 20 euros per share.
comments powered by Disqus
Follow RTT