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Cancer Center Uses Varian Medical's Radiosurgery System

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Shares of Calif.-based medical instruments maker Varian Medical Systems (VAR - Free Report) rose 0.5% since the announcement of Portugal-based Champalimaud Center for the Unknown performing cancer treatments using the company’s advanced Edge radiosurgery system for the first time.

The Edge radiosurgery system is capable of making fast, precise and non-invasive surgery as an alternative to conventional surgery for treating patients with lung, prostate and brain tumors. The system helps clinicians destroy tumors from outside the body using high-energy X-rays. The surgery involving the Edge radiosurgery system involves no incisions and there is less chance of patients suffering from healing, pain, and recovery issues associated with conventional surgery.

VAR’s Calypso “GPS for the Body” enables targeting precision for tracing tumor position in real time. This system can also alert clinicians if a patient shifts in a way that could undermine the accuracy of the treatment.

The Champalimaud Center also used the Edge radiosurgery system for “hypo-fractionated” stereotactic ablative body radiotherapy for two prostate cancer patients. According to the doctors at the center, hypo-fractionation is very efficient in tumor control for prostate cancer patients. Very soon, leading cancer centers around the world – including the Henry Ford Clinic in Detroit and the Humanitas Clinic in Milan – will start doing cancer treatments using the Edge Radiosurgery system.

VAR posted a 5.8% rise in net earnings per share to 91 cents for the first quarter of fiscal 2014 from 86 cents in the prior fiscal quarter, and edged past the Zacks Consensus Estimate by a penny. With this, VAR also met its own guidance of a 6–7% rise in earnings per share to 87–91 cents for the quarter.

Revenues in the quarter escalated nearly 5.0% to $711.5 million during the quarter, but lagged the Zacks Consensus Estimate of $718 million. The growth was attributable to the continued strong demand for Oncology services and X-ray imaging components during the quarter.  

For fiscal 2014, VAR expects revenues to grow by 6–8% compared with the earlier guidance of 6–7%. However, the company reiterated its earnings per share guidance between $4.22 and $4.34 for the year. The current Zacks Consensus Estimate of $4.29 lies within the guided range.

For the second quarter of fiscal 2014, VAR expects revenues to be flat on a year-over-year basis. However, it expects earnings per share for the quarter in the range of $1.00 to $1.04. The current Zacks Consensus Estimate of $1.02 lies within the guided range.

Currently, VAR carries a Zacks Rank #3 (Hold). Some better-ranked medical instrument stocks that are currently worth a look include Cynosure Inc. , Natus Medical Inc. (BABY - Free Report) and Syneron Medical Ltd. . All the three stocks sport a Zacks Rank #1 (Strong Buy).

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