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Varian Medical Systems 1Q profit rises 22 percent

Wed, 01/26/2011 - 1:45pm
The Associated Press

Varian Medical Systems Inc., which makes equipment and software used to treat cancer, said Wednesday its profit rose 22 percent in the fiscal first quarter on greater oncology system and x-ray revenue.

Varian earned $96.5 million, or 80 cents per share, in the quarter ended in December, up from $78.8 million, or 63 cents per share, in the first quarter of fiscal 2010. Revenue increased 7 percent to $579.9 million from $540.9 million.

Analysts expected a profit of 73 cents per share and $584.4 million in revenue, according to FactSet.

The company said its oncology revenue rose 5 percent to $452 million because of strong demand in North America. Revenue in Europe sales also improved, but sales in Japan fell sharply because a two-year stimulus program ended in March. Revenue from X-ray products grew 22 percent $112 million. Other revenue fell 19 percent to $16 million.

Varian boosted its fiscal 2011 profit forecast to a range of $3.39 to $3.45 per share, up from $3.34 to $3.39 per share. It believes revenue will grow 10 to 11 percent, to a range of $2.59 billion to $2.62 billion. On average analysts are expecting net income of $3.39 per share and $2.59 billion in revenue.

For the second fiscal quarter, Varian forecast earnings per share of 83 to 86 cents and revenue growth of 9 to 10 percent, which suggests a total of $638.3 million to $644.2 million. Analysts expect a profit of 83 cents per share and $637.2 million in revenue.

Shares of Varian Medical Systems fell $2.06, or 2.9 percent, to $69.90 in aftermarket trading. The stock rose 65 cents to $71.96 during the day.

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