Varian Medical Systems Beats on Both Top and Bottom Lines

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Varian Medical Systems (NYS: VAR) reported earnings on Oct. 25. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 28 (Q4), Varian Medical Systems beat slightly on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share increased significantly.


Gross margins grew, operating margins were steady, net margins expanded.

Revenue details
Varian Medical Systems recorded revenue of $756.1 million. The 11 analysts polled by S&P Capital IQ hoped for revenue of $747.7 million on the same basis. GAAP reported sales were 5.2% higher than the prior-year quarter's $719.0 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $1.08. The 14 earnings estimates compiled by S&P Capital IQ predicted $1.03 per share. GAAP EPS of $1.08 for Q4 were 24% higher than the prior-year quarter's $0.87 per share. (The prior-year quarter included -$0.08 per share in earnings from discontinued operations.)

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 42.7%, 90 basis points better than the prior-year quarter. Operating margin was 22.2%, about the same as the prior-year quarter. Net margin was 15.9%, 190 basis points better than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $662.6 million. On the bottom line, the average EPS estimate is $0.89.

Next year's average estimate for revenue is $3.00 billion. The average EPS estimate is $4.12.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 386 members out of 401 rating the stock outperform, and 15 members rating it underperform. Among 112 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 110 give Varian Medical Systems a green thumbs-up, and two 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 $67.71.

The article Varian Medical Systems Beats on Both Top and Bottom Lines originally appeared on Fool.com.

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 ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool has no positions in the stocks mentioned above. 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

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