Benzinga | Jan 25, 2021 10:11AM EST

Earnings Outlook For Varian Medical Systems

Varian Medical Systems (NYSE:VAR) releases its next round of earnings this Tuesday, January 26. Get the latest predictions in Benzinga's essential guide to the company's Q1 earnings report.

Net Income, Earnings, And Earnings Per Share

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Varian Medical Systems EPS is expected to be around $1.1, according to sell-side analysts. Sales will likely be near $842.98 million. Varian Medical Systems earnings in the same period a year ago was $1.16 per share. Quarterly sales came in at $828.90 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

The analyst consensus estimate would represent a 5.17% decline in the company's EPS figure. Revenue would be up 1.7% from the same quarter last year. Varian Medical Systems's reported EPS has stacked up against analyst estimates in the past like this:

Quarter Q4 2020 Q3 2020 Q2 2020 Q1 2020EPS Estimate 1.02 0.52 0.85 1.19EPS Actual 1.12 0.78 0.85 1.16Revenue Estimate 812.96 M 664.38 M 769.98 M 826.61 MRevenue Actual 850.50 M 694.30 M 794.50 M 828.90 M

Stock Performance

Shares of Varian Medical Systems were trading at $175.56 as of January 22. Over the last 52-week period, shares are up 19.22%. Given that these returns are generally positive, long-term shareholders can be satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Varian Medical Systems is scheduled to hold the call at 16:30:00 ET and can be accessed here.