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news release:
Varian Medical Systems Expects 12 Percent Net
Orders Growth for Second Quarter Fiscal 2007 with Softness in Oncology Systems
and Strength in All Other Businesses
Palo Alto, CA, 12 April 2007:
Varian Medical Systems
(NYSE:
VAR) today announced that it expects to report that total net orders in the
second quarter of fiscal year 2007, including orders generated in the quarter by
the newly acquired ACCEL Instruments business, grew by 12 percent over the
year-ago quarter to about $480 million with 2 percent growth in Oncology Systems
and strong growth in all other businesses.
“For the second quarter Oncology Systems should have 19 percent growth in
international orders and a 10 percent decline in North America—an unpredicted
reversal of what occurred in the first quarter when we had strong North American
business and delays in international orders,” said Tim Guertin, president and
CEO of Varian Medical Systems. “We are experiencing greater variability in the
length of our sales cycles caused by bigger deal sizes for more sophisticated
equipment and more complex customer decision processes.”
Compared to the second quarter of last year, net orders for the company’s
security and inspection business are expected to rise by more than 225 percent,
and Varian’s X-Ray Products business should have an estimated 16 percent
increase in net orders, driven largely by demand or flat panel image detectors
for filmless X-ray imaging. The company expects to report $22 million in net
orders in the quarter for proton therapy and instrumentation products received
subsequent to the ACCEL acquisition.
Including consolidation of approximately $47 million in acquired backlog from
ACCEL, the company estimates total orders for the second quarter should increase
23 percent and the quarter-ending backlog should increase 19 percent from the
year ago period.
Second quarter revenues, including those from ACCEL, should increase by about 7
percent. “Excluding ACCEL, revenues for the quarter were a couple of percentage
points weaker than expected due in part to construction delays at Oncology
Systems customer sites,” Guertin said. “While we are disappointed at the
slowness in Oncology Systems for the first half of the fiscal year, it is
gratifying to see how much growth these emerging businesses can contribute to
our company. We remain confident in our long-term prospects, and we believe we
can sustain 10 to 15 percent long-term growth for the company with contributions
from our emerging businesses,” Guertin said.
“Earnings per diluted share for the second quarter should be slightly ahead of
previous guidance,” Guertin said. The results provided in this release are
preliminary numbers and the company will provide more detailed information on
Wednesday, April 25 when it reports the full results for the quarter.
Varian Medical Systems, Inc., of Palo Alto, California is the world’s leading
manufacturer of medical products for treating cancer and other medical
conditions with radiotherapy, brachytherapy, radiosurgery, and proton therapy.
The company is also a premier supplier of X-ray tubes and digital detectors for
imaging in medical, scientific, and industrial applications. Varian Medical
Systems employs approximately 4,200 people who are located at manufacturing
sites in North America and Europe and in its 56 sales and support offices around
the world. Additional information is available on the company’s investor
relations web site at
http://www.varian.com.
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