We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Varian Medical (VAR) Beats on Earnings and Revenues in Q2
Read MoreHide Full Article
Palo Alto, CA-based leading manufacturer of medical devices and software Varian Medical Systems, Inc. reported adjusted earnings of 89 cents per share in the second quarter of fiscal 2017, which beat the Zacks Consensus Estimate by a penny. However, adjusted earnings declined 18.3% on a year-over-year basis.
Meanwhile, revenues of $655 million were up 6% from the year-ago quarter (up 7% at constant currency). Revenues were also ahead of the Zacks Consensus Estimate of $643 million.
Coming to backlog, Varian Medical reported a backlog of $3.1 billion at the end of the fiscal second quarter, up 4% on a year-over-year basis.
Varian Medical carries a Zacks Rank #3 (Hold) at the moment.
Segment Details
Oncology Systems: At this segment, revenues totaled $624 million, up 7% year over year. Per management, the oncology segment witnessed growth in every region, and solid potential in the emerging markets. The oncology software and service business also put up an impressive show.
Gross orders in the quarter totaled $648 million, up 6% at cc from the year-ago quarter. In the U.S., gross orders increased 3% at cc. In EMEA and APAC, gross orders jumped 10% and 7%, respectively, on a year-over-year basis.
Particle Therapy: Second-quarter revenues at the segment were $31 million, up 1% on a year-over-year basis. During the quarter, the company registered orders worth $28 million, including an order for a new single-room ProBeam Compact system in Delray, FL.
Notably, Varian Medical’s imaging components business segment is now operating separately as Varex Imaging and is accounted as a discontinued operation.
Margins
In the second quarter, Varian Medical posted a gross margin of 42%, flat year over year.
Expenses on research and development (R&D) in the quarter were $53.3 million or 8.1% of revenues, up 170 basis points (bps) year over year.
Meanwhile, selling, general and administrative (SG&A) expenses, this accounted for 20.1% of revenues in the second quarter, compared to 17.2% in the year-ago quarter. This marked a 290-bps expansion in margins.
Varian Medical Systems, Inc. Price, Consensus and EPS Surprise
For the full fiscal, Varian Medical expects revenues from continuing operations to grow in the range of 2% to 4%. Adjusted earnings per share from continuing operations are projected in the band of $3.56 to $3.64.
For the third quarter, Varian Medical revenues are expected to increase 3% on a year-over-year basis. Adjusted earnings per diluted share are forecasted in the band of 92 cents to 96 cents.
Inogen has a long-term expected earnings growth rate of 17.50%. The stock represents an impressive one-year return of 66.7%.
Hologic has a long-term expected earnings growth rate of 11.33%. The stock has a solid one-year return of roughly 31.5%.
Sunshine Heart posted a positive earnings surprise of 58.24% in the last reported quarter. The stock recorded a stellar EPS growth rate (last 3–5 years of actual earnings) of almost 22%.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Varian Medical (VAR) Beats on Earnings and Revenues in Q2
Palo Alto, CA-based leading manufacturer of medical devices and software Varian Medical Systems, Inc. reported adjusted earnings of 89 cents per share in the second quarter of fiscal 2017, which beat the Zacks Consensus Estimate by a penny. However, adjusted earnings declined 18.3% on a year-over-year basis.
Meanwhile, revenues of $655 million were up 6% from the year-ago quarter (up 7% at constant currency). Revenues were also ahead of the Zacks Consensus Estimate of $643 million.
Coming to backlog, Varian Medical reported a backlog of $3.1 billion at the end of the fiscal second quarter, up 4% on a year-over-year basis.
Varian Medical carries a Zacks Rank #3 (Hold) at the moment.
Segment Details
Oncology Systems: At this segment, revenues totaled $624 million, up 7% year over year. Per management, the oncology segment witnessed growth in every region, and solid potential in the emerging markets. The oncology software and service business also put up an impressive show.
Gross orders in the quarter totaled $648 million, up 6% at cc from the year-ago quarter. In the U.S., gross orders increased 3% at cc. In EMEA and APAC, gross orders jumped 10% and 7%, respectively, on a year-over-year basis.
Particle Therapy: Second-quarter revenues at the segment were $31 million, up 1% on a year-over-year basis. During the quarter, the company registered orders worth $28 million, including an order for a new single-room ProBeam Compact system in Delray, FL.
Notably, Varian Medical’s imaging components business segment is now operating separately as Varex Imaging and is accounted as a discontinued operation.
Margins
In the second quarter, Varian Medical posted a gross margin of 42%, flat year over year.
Expenses on research and development (R&D) in the quarter were $53.3 million or 8.1% of revenues, up 170 basis points (bps) year over year.
Meanwhile, selling, general and administrative (SG&A) expenses, this accounted for 20.1% of revenues in the second quarter, compared to 17.2% in the year-ago quarter. This marked a 290-bps expansion in margins.
Varian Medical Systems, Inc. Price, Consensus and EPS Surprise
Varian Medical Systems, Inc. Price, Consensus and EPS Surprise | Varian Medical Systems, Inc. Quote
Guidance
For the full fiscal, Varian Medical expects revenues from continuing operations to grow in the range of 2% to 4%. Adjusted earnings per share from continuing operations are projected in the band of $3.56 to $3.64.
For the third quarter, Varian Medical revenues are expected to increase 3% on a year-over-year basis. Adjusted earnings per diluted share are forecasted in the band of 92 cents to 96 cents.
Stocks to Consider
Better-ranked stocks in the broader medical sector include Inogen Inc. (INGN - Free Report) , Hologic, Inc. (HOLX - Free Report) and Sunshine Heart Inc . Notably, all the stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Inogen has a long-term expected earnings growth rate of 17.50%. The stock represents an impressive one-year return of 66.7%.
Hologic has a long-term expected earnings growth rate of 11.33%. The stock has a solid one-year return of roughly 31.5%.
Sunshine Heart posted a positive earnings surprise of 58.24% in the last reported quarter. The stock recorded a stellar EPS growth rate (last 3–5 years of actual earnings) of almost 22%.
The Best & Worst of Zacks
Today you are invited to download the full, up-to-the-minute list of 220 Zacks Rank #1 ""Strong Buys"" free of charge. From 1988 through 2015 this list has averaged a stellar gain of +25% per year. Plus, you may download 220 Zacks Rank #5 ""Strong Sells."" Even though this list holds many stocks that seem to be solid, it has historically performed 6X worse than the market. See these critical buys and sells free >>