Varian’s Performance by Geography and Future Growth Potential




Varian Medical Systems (VAR) has a wide presence across the geographies around the world. In fiscal 2017, orders in the Americas region registered growth of 3%, and North America reported the strongest growth of 6%. Orders from Asia Pacific increased 7%, and Europe registered double-digit order growth of 14%. The geographical mix of Europe increased to 30%, a growth of 2% from 2016. The Oncology segment drove the company’s overall order growth, driven by robust growth in the installed base of the Linear Accelerator system.

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Other major oncology technology players include Intuitive Surgical (ISRG), Thermo Fisher Scientific (TMO), and Boston Scientific (BSX), which had sales growth of 18%, 13.9%, and 5.5%, respectively, in their recently reported quarters. The Health Care Select Sector SPDR ETF (XLV) has ~0.32% of its total holdings in VAR.

Oncology business results by geography

Oncology sales in the Americas rose 2%, whereas order growth in the region rose 1% in 4Q17. North America was the major growth driver in the region with an 8% growth, which was driven by the robust demand for VAR’s systems. Ten Halcyon systems were ordered in North America in the quarter. One Halcyon system was ordered by Barnes-Jewish Hospital, and five centers in their network ordered four TrueBeam Radiotherapy Systems and software packages.

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Latin America registered a weak performance in the quarter with orders falling 46%. That was due to uncertainty over various public-sector sales. Brazil, however, reported strong growth. Oncology sales and orders in the Asia Pacific region fell 5% and 10%, respectively. Japan’s orders fell in the double digits in the quarter, driven by market softness. China’s market continued to be robust with double-digit growth.

In the EMEA (Europe, the Middle East, and Africa) region, sales growth was 3%, whereas order growth was 32% for 4Q17. Twelve Halcyon system orders were booked from this region. India registered strong double-digit orders growth, driven by $15 million worth of orders for three TrueBeam and two VitalBeam systems in West Bengal.


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