) recently came out with its preliminary results for the first
quarter of fiscal 2012. The company expects to report revenues of
$270 million during the quarter, surpassing the Zacks Consensus
Estimate of $263 million. However, on a year-over-year basis,
projected revenues are down 4.4%.
The company also assumes the adjusted earnings per share for the
quarter to be in line or above the street consensus estimate. The
Zacks Consensus Estimate for the first quarter of 2012 is 31 cents.
Illumina is slated to release its first quarter result by the end
of April 2012.
With the growing demand for the Next Generation Sequencing (
) products in research and clinical development, Illumina is able
to continue with its growth momentum in the life science tools
industry. We are also pleased with the company's impressive
book-to-bill ratio of 1.1 (the third consecutive quarter with over
1) reflecting significant demand in the market particularly on the
heels of new projects. Also, for the quarter, the company's
annualized HiSeq consumable pull-through is up at an encouraging
level of around $300,000 per instrument.
Last quarter update
In the last quarter, Illumina derived 92.1% of its total revenue
from products while the remaining comes from services. During the
quarter, Illumina also declared significant development of its
MiSeq platform. Additionally, the company also introduced HiSeq
2500, a new multi-mode next-generation sequencer with the option
for the upgradation of its existing HiSeq 2000 instruments. The
company expects the new system and upgrades to be available in the
second half of 2012.
Further, The company entered into a partnership with Siemens
Healthcare Diagnostics to use the MiSeq platform for Siemens'
molecular HIV tests. In addition, the company expanded its Genome
Network with the inclusion of British Columbia Cancer Agency to its
Illimina also emphasised on strengthening its management by
) Senior Vice President of Finance, Marc Stapley, as Chief
Financial Officer and created the position of a Senior Vice
President and General Manager of Translational and Consumer
Genomics Business Unit.
Update on Roche bid
The burning issue for Illumina these days is whether the company
will yield to
) hostile takeover bid. Now the talking point in the industry is
whether the rejection of Roche bid will be beneficial for Illumina
and its shareholders in the long run? The tussle between Roche and
Illumina dates back to January 25, 2012 when Roche offered $44.50
per share (aggregate value $5.7 billion) in cash to acquire
Illumina. This offer was at a premium to the then prevailing share
price ($37.69) of Illumina.
However, last week, subsequent to Illumina's second request
letter to its shareholders justifying the earlier Roche bid as
undervalued, Roche increased its offer price to $51.00 from the
previously declared $44.50 a share. Apart from rejecting the
revised Roche bid this week, Illumina also released a third request
letter to its shareholders discussing the huge growth prospect of
the next-generation sequencing market. The company also restated
the board's recommendation to vote against the Roche proposal and
in favor of Illumina's director nominees at its 2012 annual
Based in California, Illumina develops, manufactures, and
markets life science tools and integrated systems for the analysis
of genetic variation and function at a broader scale. The company
derives product revenues from the sale of microarrays and DNA
sequencing products. As a life sciences tools company, Illumina has
a track record of innovation and operational excellence.
Currently, Illumina's shares are trading at $52.00, which is
higher than the revised bid price, reflecting the investors' high
aspiration about the company's future prospects. Despite the back
drop of a hostile takeover bid from Roche, we are also encouraged
with the impressive and consistent growth performance of Illumina
and expectthe company to expand in fiscal 2012 and beyond.
Presently, Illumina retains a short-term Zacks #2 Rank (Buy). Over
the longer term, we have a 'Neutral' recommendation on the
ILLUMINA INC (
): Free Stock Analysis Report
PFIZER INC (
): Free Stock Analysis Report
To read this article on Zacks.com click here.