Varian, Inc. (Varian) has reported preliminary results for the first quarter ended January 2, 2009. For the period, company now expects sales between $205 million and $210 million. Non- GAAP (adjusted) diluted earnings per share should be between $0.50 and $0.54 including share-based compensation expense of about $0.05. On a GAAP basis, diluted earnings per share should be between $0.41 and $0.45.
Adjusted operating margins should be between 11.2% and 11.4% in the quarter, while GAAP operating margins should be between 9.4% and 9.6%. Operating cash flow should be between $15 million and $20 million for the quarter.
“With respect to our research products sales, we have said many times that the timing of revenues on these products is impacted by factors such as laboratory readiness and access to customer sites, duration of installations and availability of key components and installation personnel,” said Garry W. Rogerson, president and chief executive officer. “Although we entered the first quarter with a strong backlog for these products and saw solid orders during the quarter, delays due to some of these factors, compounded by the shorter working month and customer shutdowns in December, were responsible for a large portion of our decrease in revenues, and all of the decrease in earnings, in the first quarter. Fortunately, we expect to recognize most of these revenues during the second and third quarters.”
“We believe the broader weakness in orders that we experienced during December reflected a combination of factors including the deterioration of global economic conditions, the timing and extent of customer shutdowns and the shorter working month,” said Rogerson. “It is currently difficult to say how much each of these factors contributed to the weaker order activity and whether that weakness is indicative of any longer-term trend.”
“We therefore believe, as we separately announced today, it is prudent to take steps to reduce our cost structure and position ourselves favorably to respond to demand fluctuations while continuing to invest in new product development and maintaining our high standard of customer service and support. Our product, application and geographic diversity continue to position us well, in particular with the prospect of increased global governmental spending on research and other applications.”