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Varian Medical (VAR) to Report Q1 Earnings: What's in Store?

Zacks Equity Research

Varian Medical Systems Inc.’s VAR first-quarter fiscal 2019 results are scheduled to release on Jan 23, after market close.

A strong overseas presence and product launches are likely to favor the company’s fiscal first-quarter results.

Last-Quarter Results

In the last reported quarter, Varian Medical’s adjusted earnings of $1.16 per share missed the Zacks Consensus Estimate of $1.19. Adjusted earnings however improved 11.5% on a year-over-year basis.

Revenues totaled $801.6 million, which beat the consensus mark of $762.7 million. On a year-over-year basis, revenues rose 11.1% or 12% at constant currency.

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Which Way Are Estimates Treading?

Currently, the Zacks Consensus Estimate for fiscal first-quarter revenues is pegged at $717.9 million, reflecting a rise of 5.8%. The same for adjusted earnings is pinned at $1.06.

Let’s discuss the factors that are likely to impact Varian Medical’s upcoming quarterly results.

Varian Medical Systems, Inc. Price and EPS Surprise

 

Varian Medical Systems, Inc. Price and EPS Surprise | Varian Medical Systems, Inc. Quote

Strong International Presence

Varian Medical enjoys a significant global presence.

Last November, the company’s coveted Halcyon system has been approved by the China National Medical Product Administration. (Read More: Varian Medical's Halcyon Gets NMPA Approval in China)

In October, Varian Medical’s Advanced Radiotherapy Clinical School will run courses at India-based Reliance Group's flagship Kokilaben Dhirubhai Ambani Hospital (KDAH) in Mumbai. (Read More: Varian & Reliance Group Tie Up to Enhance Cancer Care)

In September, the company collaborated with Kenya’s Mediheal Group of Hospitals to expand radiotherapy access in the country. (Read More: Varian Up on Tie-Up With Kenya's Mediheal Group of Hospitals)

Product Launches

Last October, Varian Medical announced a new single-room proton therapy system, ProBeam 360°, which enables efficient Intensity Modulated Proton Therapy and faster treatment by minimizing patient repositioning and re-imaging.

Additionally, the company launched Bravos system for High Dose Rate (HDR) brachytherapy treatments, a result of five years of in-clinic research. Notably, the system is designed to improve patient and clinic experience by simplifying brachytherapy treatment.

Reflective of these factors, Varian Medical has issued a solid fiscal 2019 guidance, with revenue growth expected in the range of $3.06-$3.15 billion, reflecting 5-8% growth year over year. The Zacks Consensus Estimate for revenues is pegged at $3.10 billion, within the guided range.

Adjusted earnings per share are projected in the range of $4.60-$4.75. The Zacks Consensus Estimate for earnings is pegged at $4.96, within the range.

Earnings Whispers

Per our proven model, a stock needs to have a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) to deliver a positive earnings surprise. This is not the case here as you will see below.

Earnings ESP: Varian Medical has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Varian Medical carries a Zacks Rank #3. Please note that we caution against stocks with a Zacks Rank #4 (Sell) or 5 (Strong Sell) going into the earnings announcement, especially when the company is seeing negative estimate revision.

Stocks Worth a Look

Here are a few medical stocks worth considering as they have the right combination of elements to post an earnings beat this quarter.

PerkinElmer PKI has an Earnings ESP of +0.77% and a Zacks Rank #3.

Baxter International BAX has an Earnings ESP of +1.15% and a Zacks Rank #3.

DexCom DXCM has an Earnings ESP of +23.03% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

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