Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of radiation-emitting-device maker Varian Medical Systems (NYS: VAR) surged 16% today after its quarterly results and guidance easily topped Wall Street expectations.

So what: Varian shares have slumped in 2012 on lackluster revenue growth, but today's wide fourth-quarter beat -- adjusted EPS of $1.08 on revenue of $756 million versus the consensus of $1.03 and $747 million, respectively -- and upbeat guidance are forcing analysts to increase their valuation estimates. Sales at its oncology systems and X-ray products segments rose a solid 7% and 9%, respectively, suggesting that overall demand is much healthier than Mr. Market had previously thought.


Now what: Management now sees 2013 EPS of $4.06-$4.16 and revenue growth of 8%-9%. "Our company is positioned for growth by focusing on continuous innovation, expanding our global presence, building our software and service franchises and commercializing protons," CEO Dow Wilson said in a statement. More important, with the stock still off its 52-week highs and trading at a forward P/E of 15, there might still be enough room to buy into that growth.

Interested in more info on Varian? Add it to your watchlist.

The article Why Varian Medical Shares Surged originally appeared on Fool.com.

Fool contributor Brian Pacampara has no positions in the stocks mentioned above. The Motley Fool has no positions in the stocks mentioned above. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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