Varian posts Q1 sales growth despite x-ray weakness

For Varian Medical Systems, strength in oncology systems helped offset weakness in x-ray products in the first fiscal quarter of 2002. Orders for its SmartBeam IMRT (intensity modulated radiation therapy) system helped drive 17% growth in oncology sales, while x-ray revenues fell 25%.

Palo Alto, CA-based Varian recorded sales of $175.1 million for the period, up 7% compared with revenues of $161.4 million in the first quarter of 2001. Net earnings were $13.2 million, versus earnings of $9.5 million (not including the impact of a change in accounting principles on the year-ago results).

In its oncology systems division, sales totaled $145.9 million, compared with revenues of $124.6 million in the same period a year ago. SmartBeam IMRT sales in North America are being driven by increased Medicare reimbursement in cancer clinics, according to Varian president and CEO Richard Levy.

Yet the company’s x-ray products division saw sales decline to $24.7 million, from $32.9 million in the first quarter of 2001. Sales of CT scanning tubes fell sharply due to continued excess inventory at a key Varian customer in Japan, the company said. X-ray sales should continue to be soft through the second quarter of this year, Levy said, and the division has initiated cost controls that have included a reduction in personnel.

Varian’s Gintzon Technology Center R&D facility contributed first-quarter revenues of $4.5 million, compared with $3.9 million in revenues in the year-ago quarter.

By staff writers
January 30, 2002

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Copyright © 2002

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