Varian Medical Systems Hit 52-Week High

Zacks

Shares of Calif.-based medical instruments maker Varian Medical Systems (VAR) reached new 52-week high of $84.79 in mid-day trading yesterday. Shares of the company closed at $84.34 on the same day, representing a decent one-year return 14.3%.

VAR has a market cap of $8.7 billion. Average volume of shares traded over the last three months stood at approximately 701.4K.

Shares of VAR started escalating following its announcement of several events supporting the increased adoption of the company’s technology and the exhibition of a comprehensive line of products in the pipeline.

VAR posted a 5.8% rise in net earnings per share to 91 cents for the first quarter of fiscal 2014 from 86 cents in the prior fiscal quarter, and edged past the Zacks Consensus Estimate by a penny. With this, VAR also met its own guidance of a 6–7% rise in earnings per share to 87–91 cents for the quarter.

Revenues in the quarter escalated nearly 5.0% to $711.5 million during the quarter, but lagged the Zacks Consensus Estimate of $718 million. The growth was attributable to the continued strong demand for Oncology services and X-ray imaging components during the quarter.  

For fiscal 2014, VAR expects revenues to grow by 6–8% compared with the earlier guidance of 6–7%. However, the company reiterated its earnings per share guidance between $4.22 and $4.34 for the year. The current Zacks Consensus Estimate of $4.29 lies within the guided range.

For the second quarter of fiscal 2014, VAR expects revenues to be flat on a year-over-year basis. However, it expects earnings per share for the quarter in the range of $1.00 to $1.04. The current Zacks Consensus Estimate of $1.02 lies within the guided range.

Currently, VAR carries a Zacks Rank #3 (Hold). Some better-ranked medical instrument stocks that currently worth a look include Cynosure Inc. (CYNO), Natus Medical Inc. (BABY), and Syneron Medical Ltd. (ELOS). All of them sport a Zacks Rank #1 (Strong Buy).

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