On Apr 29, we retained Varian Medical Systems, Inc. (VAR - Free Report) at Neutral after the company reported results for the second quarter fiscal 2013.
Why the Reiteration?
On April 24, Varian reported net earnings of $1.04 per share which beat the Zacks Consensus Estimate of $1.01 per share.
Revenues in the fiscal second quarter increased 7% year over year to $768.4 million, beating the Zacks Consensus Estimate of $765 million. Order backlog rose 4% year over year to $2,752.6 million at the end of the reported quarter. Net orders dropped 14.7% year over year to $735.8 million.
Revenues from Oncology Systems increased 3% year over year to $581.8 million in the fiscal second quarter. Net orders for the segment dropped 2% (9% drop in North America partly offset by a 4% rise ex-North America) to $555 million.
Revenues for X-Ray Products segment in the fiscal second quarter came in at $140.4 million, up 14% year over year. Revenues from the Other category rose about 43.9% from the year-ago quarter to $46.2 million in the reported quarter.
Following the release of the fiscal second quarter results, the Zacks Consensus Estimate for fiscal 2013 has remained stagnant at $4.11 over the last 7 days. The Zacks Consensus Estimate for fiscal 2014 has declined 1.3% to $4.59 during the same timeframe.
Moving ahead, Varian continues to expect revenues to grow by about 8% for fiscal 2013. Net earnings for fiscal 2013 remain unchanged in the band of $4.09 to $4.14 per share. For third-quarter fiscal 2013, the company envisions sales to grow roughly 7% year over year. Varian expects net earnings in the range of 98 cents to $1.02 per share for the fiscal third quarter.
Med-Tech Stocks that Warrant a Look
Varian carries a Zacks Rank #3 (Buy). NuVasive, Inc. (NUVA - Free Report) carries a Zacks Rank #1 (Strong Buy). Abiomed, Inc. (ABMD - Free Report) and The Cooper Companies Inc. (COO - Free Report) each carry a Zacks Rank #2 (Buy) and are expected to do well.