Varian Medical Systems Announces New Share Repurchase Plan - Analyst Blog

Varian Medical Systems ( VAR ) revealed that its board of directors came up with a new share repurchase plan through which the company can acquire 6 million shares of its common stock between Aug 15, 2014 and Dec 31, 2015. VAR expects to commence repurchasing shares under the new plan from the first quarter of fiscal 2015.

Under the present 6 million shares repurchase authorization, VAR has roughly 1.25 million shares remaining to be repurchased. The repurchase of these shares are required to be made between Dec 30, 2013 and Dec 31, 2014. In the third quarter of fiscal 2014 ended Jun 27, 2014, VAR spent $103 million to repurchase about 1.3 million shares of common stock.

VAR posted nearly 5.0% rise in adjusted earnings per share to $1.08 for fiscal 2014-third quarter (including a 6 cents impairment charge related to a portion of the company's existing equity investment in Augmenix - a privately-held company developing minimally invasive hydrogels for radiotherapy) from $1.03 for the comparable quarter of fiscal 2013. With this, earnings per share met the Zacks Consensus Estimate for the quarter.

VAR' earnings also lie within its guidance range of $1.06 to $1.10 for the quarter. Adjusted net earnings were $115.1 million in the quarter (including the $8 million impairment charge), up 2.0% from $112.8 million in the third quarter of fiscal 2013.

Revenues in the quarter scaled up 3.0% to $747.7 million, missing the Zacks Consensus Estimate of $766 million. Thanks to strong gross orders in Imaging Components and Particle Therapy businesses, which more than offset 1% decline in Oncology Systems orders. The fall in Oncology Systems orders is attributable to weakness in Japan that eclipsed double-digit rise in orders in developing markets.

For the fourth quarter of fiscal 2014, VAR expects revenues to increase in the range of 7 to 15%. The company also expects earnings per share in the range of $1.14 to $1.29 for the quarter. The current Zacks Consensus Estimate of $1.23 lies above the guided range.

Currently, VAR carries a Zacks Rank #3 (Hold). Some better-ranked medical instrument stocks that are worth a look include Alphatec Holdings, Inc. ( ATEC ), ERBA Diagnostics, Inc. ( ERB ), and RTI Surgical Inc. ( RTIX ). All of them sport a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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