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What to Expect from Varian’s Bottom Line in Q4 2018

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Oct. 17 2018, Updated 11:42 a.m. ET

Bottom line

Varian Medical Systems (VAR) is expected to report net income of $105.05 million in the fourth quarter of fiscal 2018 compared to $82.7 million in the fourth quarter of fiscal 2017, a rise of 27.02%.

The company’s net income translates to a net income per share of $1.13 in the fourth quarter of fiscal 2018 compared to $0.89 in the fourth quarter of fiscal 2017.

Varian Medical Systems generated free cash flow of $340.0 million in fiscal 2017. In fiscal 2018, it’s expected to generate free cash flow of $320.47 million. Its price-to-free cash flow ratio stands at 21.15. In comparison, the price-to-free cash flow ratios of its peers Globus Medical (GMED), Stryker (SYK), and Zimmer Biomet Holdings (ZBH) stand at 38.02, 150.93, and 22.99, respectively.

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Recent developments

On October 12, Varian announced its acquisition of Noona Healthcare, a private software company that develops a cloud-based mobile service used to capture cancer patients’ reported outcomes. This acquisition is expected to help Varian expand its portfolio of cancer care solutions.

On October 4, the company announced that it had entered into an educational partnership with Reliance Group in India to provide access to training in advanced radiotherapy and radiosurgery techniques in the country.

On September 7, Varian entered into a partnership agreement with Mediheal Group of Hospitals for the expansion of radiotherapy access in Kenya. The agreement included the supply of advanced linear accelerators to five radiotherapy centers in Kenya along with service, training, and research collaboration opportunities.

We’ll take a look at analysts’ recommendations for Varian stock and its fiscal 2018 price performance in the next article.

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