Varian Medical Systems Attempts to Improve Its Performance Growth
Fiscal 2016 performance expectations
Varian Medical Systems (VAR) raised its guidance for fiscal 2016 given higher-than-expected 3Q16 results reported on July 27, 2016. The company expects its 2016 revenues to grow approximately 3% from 2015. This growth is expected to be driven by the company’s leading position in the oncology device market and the rebound in the company’s imaging components business.
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Varian Medica Systems expects to register 2016 net diluted EPS (earnings per share) in the range of $4.62–$4.66. This outlook compares to the company’s 2015 EPS of $4.21.
According to analysts’ estimates, Varian Medical Systems will register revenues of around $3.2 billion in 2016, representing growth of around 2.8%. The adjusted EPS should come in at around $4.65, which would represent YoY growth of around 10.2% versus around 4.2% in 2015.
Varian Medical Systems’ 4Q16 revenue growth is expected to be around 7%. This outlook compares to the 0.7% YoY revenue growth reported in 3Q16. The growth in 4Q16 should be driven by mid-single-digit growth in the company’s oncology business, low-single-digit growth in the imaging business, and an additional $20 million to $25 million in proton therapy revenues.
According to analysts’ projections for 2016, Varian Medical Systems’ competitors Boston Scientific (BSX), C.R. Bard (BCR), and Accuray (ARAY) can expect to earn revenue of $2.1 billion, $7.5 billion, and $5.3 billion, respectively, in their next quarters.
Investors seeking exposure to Varian Medical Systems can invest in the iShares Russell Mid-Cap ETF (IWR). IWR has around 0.15% exposure to Varian Medical Systems.
In the next part of this series, let’s look at the company’s oncology segment growth and how it’s driving performance.