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Varian Medical Systems Exceeds Fiscal 4Q16 Estimates

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Part 4
Varian Medical Systems Exceeds Fiscal 4Q16 Estimates PART 4 OF 5

Particle Therapy Business Witnessed Continued Growth Momentum in 4Q16

Segment performance

Varian Medical Systems (VAR) registered revenues of $68.2 million in 4Q16. 7.5% of this came from the company’s oncology segment. This compares to 4.7% in 3Q16. The segment revenues are generated from 14 ongoing projects. The orders for the full year 2016 were down by around 2%. In 2015, the company had six system orders. For a brief discussion on Varian Medical Systems’ particle therapy business, read How Is Varian Positioned in the Particle Therapy Business?

Particle Therapy Business Witnessed Continued Growth Momentum in 4Q16

Key segment highlights in 4Q16

Varian Medical Systems booked its first single-room Pro-beam compact order in 4Q16, which includes a ten-year service agreement. The order was worth $87 million. The company generated $38 million worth of orders in 4Q16 in its particle therapy business. For the full year 2016, total orders amounted to $104 million. The revenues for 2016 from the particle therapy business were reported to be around $163 million, out of which $10 million were generated through service revenues.

The major competitors of Varian Medical Systems in the particle therapy business include Mitsubishi, Hitachi, and Ion Beam Applications. Major US competitors of Varian Medical Systems such as Intuitive Surgical (ISRG), C.R. Bard (BCR), and Thermo Fisher Scientific (TMO) have not yet entered this space. Investors interested in exposure to Varian Medical Systems can invest in the iShares Russell 1000 Growth ETF (IWF), which has ~0.08% exposure to VAR.

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