S&P 500 (NYSE:SPY) component Varian Medical Systems, Inc. (NYSE:VAR) reported its results for the third quarter. Varian Medical Systems, Inc. manufactures, designs, services and sells equipment and software products for treating cancer with radiotherapy, stereotactic radiosurgery and brachytherapy.
Varian Medical Systems Earnings Cheat Sheet for the Third Quarter
Results: Net income for Varian Medical Systems, Inc. rose to $98.6 million (83 cents per share) vs. $85.5 million (69 cents per share) in the same quarter a year earlier. This marks a rise of 15.3% from the year earlier quarter.
Revenue: Rose 12.3% to $649.4 million from the year earlier quarter.
Actual vs. Wall St. Expectations: VAR fell in line with the mean analyst estimate of 83 cents per share. Analysts were expecting revenue of $642 million.
Quoting Management: “Continued healthy demand for newer products contributed to solid growth in net orders and revenues during the third quarter in both our Oncology Systems and X-Ray Products business segments,” said Tim Guertin, president and CEO of Varian Medical Systems. “A variety of factors, including product retrofits in our Oncology business as well as challenging conditions in our Other segment, contributed to lower than normal gross margin for the quarter. Year-to-date, gross margins are up by half a percent.”
The company has now seen net income rise in three straight quarters. In the second quarter, net income rose 13.1% and in the first quarter, the figure rose 22.5%.
Gross margin shrank 0.8 percentage point to 43.2%. The contraction appeared to be driven by increased costs, which rose 14% from the year earlier quarter while revenue rose 12.3%.
Revenue has risen the past four quarters. Revenue increased 10.7% to $648.5 million in the second quarter. The figure rose 7.2% in the first quarter from the year earlier and climbed 1.6% in the fourth quarter of the last fiscal year from the year-ago quarter.
The company fell in line with estimates last quarter after topping expectations in the previous two quarters. In the second quarter, it topped the mark by one cent, and in the first quarter, it was ahead by 7 cents.
Competitors to Watch: Accuray Incorporated (NASDAQ:ARAY), TomoTherapy Incorporated (NASDAQ:TOMO), North American Scientific, Inc. (NASMQ), Hologic, Inc. (NASDAQ:HOLX), Theragenics Corporation (NYSE:TGX), BSD Medical Corporation (NASDAQ:BSDM), iCAD, INC. (NASDAQ:ICAD), IsoRay, Inc. (AMEX:ISR), and General Electric Company (NYSE:GE).
(Source: Xignite Financials)