Varex Imaging Plunges 12.02% on China Tariff Concerns
1min read On May 9, 2025, Varex Imaging's stock experienced a significant drop of 12.02% in pre-market trading, reflecting a notable decline in investor sentiment.
Varex Imaging Corporation recently announced its unaudited financial results for the second quarter of fiscal year 2025, revealing a mixed performance. The company reported revenues of $213 million, a 3% year-over-year increase, driven by strong demand across both medical and industrial segments. However, the company's outlook for the short term has been tempered by high tariffs imposed by China on U.S. products, which have led several China-based customers to pause purchases.
Despite the revenue growth, the company's earnings per share (EPS) and operating margins were impacted by these tariffs. The non-GAAP EPS increased to $0.26, up from $0.16 in the same period last year, but the company's guidance for the third quarter of fiscal year 2025 indicates a potential loss of up to $0.05 per share. This uncertainty has likely contributed to the stock's decline, as investors reassess the company's short-term prospects in the face of ongoing trade tensions.
Varex Imaging's management has acknowledged the challenges posed by the tariffs and has taken steps to mitigate their impact. The company plans to repay its outstanding convertible notes due in June 2025, which will reduce its overall debt burden and simplify its capital structure. However, the immediate impact of the tariffs on sales and earnings has raised concerns among investors, leading to the recent drop in the stock price.
