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Varian Medical Systems
Varian dominates the market for radiotherapy equipment, which is used to treat cancer. Spun off from Silicon Valley pioneer Varian Associates in 1999, the company has maintained a global market share of more than 60%, thanks to management excellence, marketing muscle, and innovation. Varian’s imaging technologies let doctors increase doses of radiation to cancerous tissue by avoiding healthy cells, not just through technical innovations but by creating training programs and software to boost the technologies’ acceptance by hospitals. The latest example: image-guided radiation therapy, which lets docs adjust beams for minuscule changes in tumors, and even compensate as tumors move with patients’ breathing. CEO Tim Guertin says sales can hit $3 billion within five years as Varian expands its technology to cargo-inspection gear for ports and airports.
| Overall Grade | A |
|
| Market Data | VAR | |
| Market Value (2/28/2007) |
$5.9 Billion |
|
| Profitability* | 40.5% | A |
| Sales Growth Rate** | 14.2% | B |
| 12-Month Sales | $1.7 Billion |
|
| 12-Month Net Income | $0.3 Billion |
|
| Total Return | Past 12 Months-20.6% | Past 36 Months9.7% |
| Economic Sector | Health Care | |
| Industry | Health Care Equipment | |
The overall sector letter grade reflects how the weighted average of the return on income, or return on equity, and sales growth grades compare with others in the same sector. For the overall grade as well as the ROE/ROI and sales growth grades, an "A" places a company in the top 7% of its sector and an "A-" in the top 14% of the sector. The actual ranking was done using the underlying numerical measures. Grades are for information only.
* For nonfinancial companies, three-year average pretax operating profit before interest and special items as a percentage of average invested capital. For financial companies, pretax profits as a percentage of average shareholder's equity.
*Three-year average annual sales growth based on the most recently reported 36 months, calculated using the least-squares method.
