Varian Medical Systems
The 10-second takeaway
For the quarter ended March 29 (Q2), Varian Medical Systems beat slightly on revenues and beat slightly on earnings per share.
Compared to the prior-year quarter, revenue increased. Non-GAAP earnings per share increased. GAAP earnings per share shrank to zero.
Gross margins expanded, operating margins were steady, net margins shrank.
Varian Medical Systems booked revenue of $768.4 million. The 12 analysts polled by S&P Capital IQ expected to see a top line of $758.0 million on the same basis. GAAP reported sales were 100% lower than the prior-year quarter's $720.3 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $1.04. The 15 earnings estimates compiled by S&P Capital IQ forecast $1.02 per share. Non-GAAP EPS of $1.04 for Q2 were 8.3% higher than the prior-year quarter's $0.96 per share. GAAP EPS dropped to zero from the prior-year quarter's $0.94.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 41.6%, 40 basis points better than the prior-year quarter. Operating margin was 20.3%, much about the same as the prior-year quarter. Net margin was 14.7%, 30 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $767.6 million. On the bottom line, the average EPS estimate is $1.05.
Next year's average estimate for revenue is $3.04 billion. The average EPS estimate is $4.12.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 385 members out of 400 rating the stock outperform, and 15 members rating it underperform. Among 114 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 111 give Varian Medical Systems a green thumbs-up, and three give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Varian Medical Systems is outperform, with an average price target of $76.06.
Is Varian Medical Systems the best health care stock for you? Learn how to maximize your investment income and "Secure Your Future With 9 Rock-Solid Dividend Stocks," including one above-average health care logistics company. Click here for instant access to this free report.
- Add Varian Medical Systems to My Watchlist.
Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.