Radiosurgery devices maker Varian Medical (NYSE:VAR) posted a tough quarter, with sales up a modest 1.3% and earnings sucked up by legal charges in its 2nd quarter.
Varian earlier this year agreed to pay about $35 million to settle a 7-year-old patent infringement lawsuit brought by the University of Pittsburgh, which accused Varian of infringement with its respiratory gating technology. The settlement included $5 million that was reserved in a prior year and another $25 million, or 16¢ EPS, booked in Q2. Varian plans to book the final $5 million charge in Q3.
The California-based company posted profits of $92.7 million, or 88¢ per diluted share, on sales of $778.5 million during the 3 months ended March 28. That compared with profits of $112.8 million, or $1.02 per share, on sales of $768.5 million during the same period last year.
Revenues, although flat year-over-year, came in about where they were expected and earnings before special charges topped Varian’s projections, president & CEO Dow Wilson said during a conference call this month.
"The company is continuing to execute well, and our businesses remain on track to reach our fiscal year 2014 growth targets," Wilson said. "For the fiscal year, we continue to believe that total company revenues could increase by about 6% to 8% over the prior fiscal year."
Varian expects adjusted EPS in the range of $4.06 to $4.18 for the year, with $1.06 to $1.10 projected for next quarter.