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Varian Medical shares rise on positive 3Q earnings

PALO ALTO, Calif. -- Shares of Varian Medical Systems Inc. jumped 13 percent in afterhours trading Thursday after the company reported a 20 percent rise in its fourth-quarter profit fueled by higher device sales.

Its forecast for fiscal first-quarter revenue also topped estimates.

Varian sells radiation-emitting devices used to treat tumors as well as medical imaging equipment. Orders for both types of devices grew in the third quarter, pushing revenue up 5 percent to $756 million.

"Varian's core oncology Systems and X-Ray products businesses achieved solid growth in net orders and revenues helped by customer demand around the world for our newer products," said Dow Wilson, the company's CEO.

Its stock rose $7.64 to $65.74 in afterhours trading.

Varian reported net income of $120.2 million, or $1.08 per share, up from $101 million, or 87 cents per share, in the prior year period.

That was better than the average Wall Street estimate of $1.03 per share on revenue of $747.1 million, according to FactSet.

Sales of X-ray products rose 9 percent to $130 million in the quarter. Oncology systems increased 7 percent to $590 million.

Executives expect revenue to increase 8 to 9 percent in the first fiscal quarter over the prior-year quarter. That implies revenue of between $675 million and $681 million. Analysts had been expecting $664 million.

The company expects adjusted earnings per share between 83 and 88 cents per share. Analysts are forecasting 89 cents.