Varian Medical Systems (VAR) Tops Q2 EPS by 5c; Guides FY15 EPS Below the Street

Varian Medical Systems (NYSE: VAR) reported Q2 EPS of $1.05, $0.05 better than the analyst estimate of $1.00. Revenue for the quarter came in at $759 million versus the consensus estimate of $799.66 million.

Varian Medical Systems sees FY2015 EPS of $4.02-$4.14, versus the consensus of $4.25.

The company ended the second quarter with a $3.1 billion backlog, up 10 percent from the end of the second quarter of fiscal year 2014.

"Our company generated strong North American Oncology gross order and revenue growth and also contended with severe currency headwinds that negatively impacted overall earnings, revenues and gross orders in both our major businesses," said Dow R. Wilson, CEO of Varian Medical Systems. "Orders and sales were down significantly in our Imaging Components business. Despite experiencing revenue declines, both our major businesses managed to improve their operating margins through good cost containment measures. "

Outlook

"We believe that for fiscal year 2015 total company earnings will be in the range of $4.02 to $4.14 per diluted share and that revenues will increase by about 1 to 2 percent in dollars and by about 5 percent in constant currency," said Wilson. "We now expect that challenges in our Imaging Components business, as well as currency headwinds, will more than offset the earnings momentum of the first half. We estimate that Imaging Components could negatively impact earnings by $0.08 to $0.12 per diluted share. Additionally, since our guidance last quarter, the strength of the dollar has diminished our earnings expectations by another $0.06 to $0.10 per diluted share.

"For the third quarter of fiscal 2015, we believe total company revenues should be about equal to the prior-year period in dollars and up about 4 percent in constant currency. Net earnings per diluted share for the third quarter could be in the range of $0.90 to $0.94 per diluted share. "

For earnings history and earnings-related data on Varian Medical Systems (VAR) click here.

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