Varian Medical Systems (VAR) produces high-tech medical equipment, primarily for the treatment of cancer. Its advanced technology has rewarded patient investors with long-term share value growth. Current projections indicated continued growth.
Varian Medical designs, manufactures and sells radiotherapy, radiosurgery and proton therapy devices which are used for the treatment of cancer. The products are sold worldwide, with about 60 percent of equipment sales going outside of North America.
The company also manufactures X-ray tubes and panels, which are used by manufacturers of X-ray machines in their own products. The X-ray business account for about 18 percent of revenue.
The Varian Medical 2012 first quarter closed on Dec. 31, 2011. For the quarter, the company reported revenue of $625 million, up 8 percent from $580 million a year earlier. Net income for the quarter was 79 cents per share, down from 80 cents for first quarter of 2011.
The earnings result did exceed the Wall Street consensus estimate by 4 cents. In 2011, the company reported earnings of $3.44 per share, up 16 percent from the 2010 results.
For 2012, Wall Street analysts are forecasting consensus earnings of $3.98, another 16 percent gain.
Reduced competition
During the recent earnings conference call, CEO Timothy Guertin mentioned that competitor
Siemens (SI) could be dropping out of the business.
Guertin noted that nothing was certain concerning the Siemens decision but that Varian Medical had replaced 50 Siemens units over the previous year. To have a large competitor drop out of producing this type of medical equipment would be good news for Varian investors.
Kaufman Brothers initiated coverage on Varian Medical Systems in the fall of 2011 with a buy rating and recently reiterated that rating. The Citigroup analysts reiterated a neutral rating on the stock, noting weakness in the North American sales of cancer treatment equipment.
The company next reports on April 27.
© 2012 Moneynews. All rights reserved.