Shares in Varian Medical (NYSE:VAR) fell today after the medical device maker missed expectations on Wall Street with its 1st quarter earnings.
The Palo Alto, Calif.-based company posted profits of $21 million, or 22¢ per share, on sales of $763.3 million for the 3 months ended December 30. That amounts to a bottom-line slide of 76.4% while sales grew 0.8% compared with the same period last year.
After adjusting to exclude 1-time items, earnings per share were 75¢, significantly behind the $1.05 consensus on The Street, where analysts were looking for sales of $766.4 million.
“Varian generated strong global order growth and margin gains in our oncology business as well as sales momentum in the imaging components business while recording an impairment of CPTC’s indebtedness to Varian. We remain on track with our previously announced plans to separate and establish the imaging components business as a new public company, Varex Imaging, at the end of this month. We believe this center can get on a more solid financial footing by serving a broader patient population with additional healthcare providers locally and regionally. We remain confident and committed to supporting all of our customers and to building a profitable proton business based on leading technology that is treating patients and performing at a high level. We are continuing to make good progress on 13 other installations and the sales funnel continues to look promising,” CEO Dow Wilson said in a press release.
Varian said it expects to see adjusted EPS of between 84¢ and 90¢ for the next quarter and between $2.94 and $3.06 for the full year. The company said it intends to repurchase 2 million shares of stock during its 2nd quarter.
VAR shares were trading at $86.84 apiece today in mid-day trading, down 6%.
Earlier this month, shares in Varex Imaging (NSDQ:VREXV), the $600 million components business spun out of Varian Medical, hit the market for their 1st day of public trading.
Stock in Salt Lake City-based Varex debuted Jan. 20 at $28 apiece, hitting a high of $28.50 before closing up 0.5% at $28.15 per share. Varian said earlier this month that it expects the spinout, accomplished via a tax-free distribution of shares such that each stockholder receives 0.4 shares of Varex for each Varian share, to be complete Jan. 28. The stock is slated to begin normal trading under the “VREX” symbol Jan. 30.
