Varian Medical Beats Forecast

Profits rose 2% from a year ago.
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Varian Medical Systems'

(VAR) - Get Report

first-quarter profit rose 2% from a year ago on a 12% revenue increase.

The company earned $41 million, or 30 cents a share, compared with $40 million, or 29 cents a share, a year ago. Robust order growth at the company's Oncology Systems and X-Ray Products were offset by higher selling and research and development expenses.

After adjusting for stock option expenses, the Palo Alto, Calif.-based radiation products maker earned 34 cents a share for the first quarter. Analysts polled by Thomson First Call estimated 33 cents a share.

Revenue was $334 million in the quarter, up from $299 million. The Wall Street estimate was $330.94 million.

Net orders were $402 million for the first quarter of fiscal 2006, up 20% from the year-ago quarter. Backlog at the end of the first quarter stood at $1.2 billion, 24% higher than at the end of the first quarter of fiscal 2005.

Varian said, "For the year, we believe that total company revenues should increase by about 14% above the fiscal 2005 total. Excluding the impact of expensing stock options, growth in net earnings per diluted share over comparable fiscal year 2005 periods should be in the range of 17% to 18% for the full fiscal year and for the second quarter. The company expects that the annual impact of stock option expensing will be in the range of 19 cents a share to 22 cents a share in fiscal year 2006 and about 6 cents a share for the second quarter."

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