Varian Medical (NYSE:VAR) got a jolt today from its fiscal fourth-quarter and full-year results, which met the consensus earnings forecast and topped Wall Street’s expectations for sales, and added a pair of names to its senior leadership roster.
Palo Alto, Calif.-based radiotherapy device maker posted profits of $89.3 million, or 97¢ per share, on sales of $878.9 million for the three months ended Sept. 27, marking a -23.3% bottom-line slide on sales growth of 9.6% compared with fiscal Q4 2018.
Adjusted to exclude one-time items, earnings per share were $1.21, in line with The Street, where analysts were looking for sales of $853.3 million.
Full-year profits were $310.5 million, or $3.38 per share, on sales of $3.23 billion, for a 107.1% profit increase on sales growth of 10.5% compared with fiscal 2018.
“This is the second consecutive fiscal year we have reported double-digit revenue growth and 9% oncology orders growth; our core business is strong and being powered by our continuous innovation cycle, and our acquisitions are delivering on growth expectations,” CEO Dow Wilson said in prepared remarks. “While we have more work to do in sharpening our execution, our order and revenue growth has us looking forward to the next fiscal year. We have strong momentum exiting our fourth quarter and our long-term growth and value creation strategy is delivering for patients, clinicians and our shareholders.”
Varian said being excluded from the U.S-China trade war added $21 million to the top line during the quarter, cut cost of revenues by $4 million but triggered a $2 million expense for receiving the exclusion in China, for a net gain of $23 million, or adjusted EPS of 19¢ (another $11 million in tariff refunds didn’t arrive in time to be counted so will go toward fiscal 2020’s books). Those gains were mostly wiped out, however, by provisions contained in the tax cuts passed in 2017 and charitable donations, the company said.
If the tariff exclusions hold, Varian said it expects to report fiscal 2020 adjusted EPS of $5.30 to $5.45 on sales of $3.52 billion to $3.61 billion.
The company also said it promoted finance SVP & CFO Gary Bischoping Jr. to president of its interventional oncology business, effective Dec. 1. Finance & investor relations SVP Michael Bruff was promoted to take over as CFO, Varian said.
“These moves will optimally position Varian for continued growth and are the result of our strong succession planning process,” Wilson said. “During his tenure as CFO, Gary reset resource and capital allocation to invest in organic and inorganic opportunities focused on driving long-term growth and value creation. In addition, he led a successful initiative to build and strengthen the broader CFO organization’s capabilities. Gary will leverage his keen business expertise to further build Varian’s interventional oncology solutions’ go-to-market organization, product portfolio and business management system to take advantage of the exciting opportunities we see in the interventional oncology space.
“Mike understands the Varian processes and strategy, and he has the right background and experience to help navigate Varian through the next growth stages,” he added. “As Varian continues to evolve and grow, our deep bench of leadership capabilities across the organization will help propel our business to success in the near- and long-term.”
VAR shares were up 7.5% to $126.25 apiece today in mid-afternoon trading.