Varian Medical Systems, Inc.’s first-quarter fiscal 2020 results are scheduled to release on Jan 29, after market close. In the last reported quarter, the company’s earnings met estimates. It has a positive surprise of 1.6% for the trailing four quarters, on average.

Let’s take a look at how things are shaping up prior to this announcement.

Estimates Picture

Currently, the Zacks Consensus Estimate for first-quarter revenues is pegged at $830.8 million, suggesting growth of 12.1% from the year-ago number. The same for adjusted earnings per share (EPS) stands at $1.21, indicating a year-over-year improvement of 14.2%.

Key Catalysts

Varian’s solid Oncology platform prospects are expected to have driven first-quarter results. Not to forget, in the last reported quarter, the segment accounted for 93.3% of net sales.

Notably, Varian’s key radiotherapy solutions — Eclipse and TrueBeam — are currently seeing robust demand from healthcare vendors. Additionally, the Eclipse Treatment Planning software and ARIA Oncology Information system have been picked by three centers in Serbia.

That’s not all. The company won its first big software tender in China at Tianjin Tumor Hospital, which has implemented the ARIA China Clinical Information platform. This is also expected to reflect in first-quarter results.

Management is also optimistic about the CTSI acquisition in early 2019, which has been integrated into the Oncology unit and RapidPlan, which is witnessing solid demand. Moreover, through acquisitions of Endocare, Alicon and Boston Scientific’s (BSX Quick QuoteBSX - Free Report) microspheres portfolio, Varian has strengthened its Interventional Oncology Solutions arm.

Reflective of these, Varian issued a strong view for fiscal 2020.

The company expects revenues within $3.52-$3.61 billion, representing year-over-year growth of 9-12% and organic growth of 7-9%.

Adjusted EPS is projected between $5.30 and $5.45.

Operating margin is expected between 17.5% and 18.5%, while cash flow from operations is projected in the band of $450-$500 million.

However, Varian has been facing headwinds in Japan which impacted the company’s APAC revenues in the last reported quarter. In fact, management expects to see continued headwinds in Japan in the first half of fiscal 2020.

Earnings Whispers

Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise. This is not the case here as you will see below.

Earnings ESP: Varian Medical has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Varian Medical carries a Zacks Rank #3.  You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Worth a Look

Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.

DexCom (DXCM Quick QuoteDXCM - Free Report) has an Earnings ESP of +17.07% and a Zacks Rank #2.

Baxter International (BAX Quick QuoteBAX - Free Report) has an Earnings ESP of +1.32% and a Zacks Rank #3.

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