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news release:
Varian Reports Better Than
Expected First Quarter
Palo Alto, CA, January 25:
Varian, Inc. (Nasdaq:
VARI)
reported first quarter 2006 net earnings of $9.7 million, or $0.30 diluted
earnings per share, compared to $11.7 million, or $0.33 diluted earnings per
share, in the first quarter of fiscal year 2005. During the period, the company
adopted the provisions of FAS 123(R), resulting in a $2.0 million share-based
compensation expense. This reduced net earnings for the first quarter by $1.3
million, or $0.04 per diluted share. The company's results for prior periods do
not include compensation expense relating to stock options or shares issued
under the company's employee stock purchase plan.
Revenues were $195.7 million in
the first quarter of fiscal year 2006, an increase of 2.5% from $190.9 million
in the first quarter of fiscal year 2005. The prior year revenues do not
include PL International Limited (Polymer Laboratories), which was acquired and
became part of the Scientific Instruments segment in November 2005. The
operating profit margin was 7.5%, compared to 6.9% in the same quarter a year
ago.
Scientific Instruments revenues
for the first quarter of fiscal year 2006 were $161.3 million, representing a
3.4% increase from revenues of $156.0 million in the first quarter of the prior
year. Pro forma operating profit margin was 11.2% in the first quarter of fiscal
year 2006, compared to 10.4% in the prior-year quarter. On a GAAP basis,
operating profit margin was 7.8% in the first quarter of fiscal year 2006 (which
includes a 0.6% impact of adopting FAS 123(R)), compared to 7.2% in the same
quarter a year ago.
Vacuum Technologies revenues
were $34.4 million in the first quarter of fiscal year 2006, compared to $35.0
million in the first quarter of fiscal year 2005. Vacuum Technologies pro forma
operating profit margin was 18.5% in the first quarter of fiscal year 2006,
compared to 17.7% in the first quarter of the prior year. On a GAAP basis,
operating profit margin was 17.7% in the first quarter of fiscal year 2006
(which includes a 0.8% impact of adopting FAS 123(R)), compared to 17.6% in the
prior-year quarter.
For the combined segments, pro
forma operating profit margin before unallocated corporate costs was 12.5% in
the first quarter of fiscal year 2006, compared to 11.7% in the prior-year
quarter. On a GAAP basis, operating profit margin before unallocated corporate
costs was 9.6% in the first quarter of fiscal year 2006 (which includes a 0.7%
impact of adopting FAS 123(R)), compared to 9.1% in the first quarter of fiscal
year 2005.
Outlook
"With strong orders for most of
our information rich detection products, and a continuing trend of mix shift to
higher margin products, we are well positioned for good revenue and pro forma
profit growth in the second half of 2006 and into 2007," said Rogerson.
"Additionally, with the increased investment in R&D, we expect new products to
increase our future growth prospects. The strategy we put in place two years ago
continues to work for us."
Varian, Inc. maintained its
guidance for fiscal year 2006 and provided initial guidance for the second
quarter. Pro forma diluted earnings per share are expected to be $1.94 plus or
minus $0.06 for fiscal year 2006, and $0.44 plus or minus $0.03 for the second
quarter. On a GAAP basis, diluted earnings per share are expected to be $1.54
plus or minus $0.06 for fiscal year 2006, and $0.34 plus or minus $0.03 for the
second quarter.
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