Varian profit top estimates on strong demand for oncology services

Thu Oct 25, 2012 5:18pm EDT

* Fourth-quarter adj EPS $1.08 vs est $1.03

* Fourth-quarter revenue $756 mln vs est $747.4 mln

* Sees FY13 EPS $4.06-$4.16 vs est $4.10

* Shares up 12 percent after market

Oct 25 (Reuters) - Medical device maker Varian Medical Systems posted better-than-expected quarterly results, driven by higher demand for its oncology services and X-Ray products, sending its shares up 12 percent.

Fourth-quarter net income from continued operations rose to $120.2 million, or 1.08 cents per share, from $110.4 million, or 95 cents per share, a year earlier.

Revenue rose about 5 percent to $756 million.

Analysts on average expected earnings of $1.03 per share on revenue of $747.4 million, according to Thomson Reuters I/B/E/S.

"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," Chief Executive Dow Wilson said.

Varian's customers include university research and community hospitals, private and governmental institutions, healthcare agencies, doctors' offices and cancer care clinics.

For 2013, the company expects to earn between $4.06 and $4.16 per share and sees revenue growth of 8 percent to 9 percent.

Analysts expect the company to earn $4.10 per share on revenue of $2.99 billion.

Shares of Palo Alto, California-based Varian were trading up 12 percent at $65.01 in after hours trading. They have fallen almost 17 percent since the beginning of the year, underperforming the S&P Health Care Sector Index, which has grown 14.67 percent in the same period.

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