) reported third quarter 2012 adjusted earnings per share (EPS)
of 38 cents (excluding the impact of amortization of intangible
assets), missing the Zacks Consensus Estimate by a penny but
way-above the year-ago adjusted EPS of 20 cents. However, the
GAAP EPS came in at 22 cents, up considerably from the year-ago
level of 15 cents.
Revenues increased a robust 21% year over year to $235 million
during the quarter on the back of strong sequencing business with
solid HiSeq sales and an increase in delivery of whole-genome
service contracts. Reported revenues were ahead of the Zacks
Consensus Estimate of $284 million. This also included revenues
of $1 million from the BlueGnome acquisition that was announced
on September 19, 2012.
During the quarter, there was 19.1% increase in product
revenues to $262.4 million, and a 54.6% rise in service revenues.
The company derives 91.8% of its total revenue from products,
while the remaining comes from services.
Product revenues are primarily attributed to the sale of
Microarrays and DNA Sequencing products. Product revenues consist
of sales proceeds from the Consumables and Instruments segment.
Services and other revenues comprise genotyping and sequencing
services as well as instrument maintenance contracts.
Consumable revenue (consisting 62% of the company's total
revenue) was $177 million, up 22% year over year, resulting from
a larger installed base of both HiSeq and MiSeq. Instruments
revenues were up 15% year over year to $82 million in the third
quarter, primarily due to the impact of MiSeq shipment which
began in the year-ago quarter.
During the third quarter, Illumina completed the acquisition
of BlueGnome, a leading provider of cytogenetics and in vitro
fertilization (IVF) screening products. The company also
introduced an advanced Individual Genome Sequencing Services
(IGS), powered by HiSeq 2500.
The company also formed a strategic association with Partners
HealthCare, a healthcare system developed by Brigham and Women's
Hospital and Massachusetts General Hospital to introduce
next-generation sequencing (NGS) clinical interpretation and
reporting tools. Further, the company launched Infinium HumanCore
Arrays for economical large-scale genetic studies. In the same
quarter, FDA selected Illumina's MiSeq system for use in an
extensive program to identify foodborne pathogens.
The company's adjusted gross margin (Excluding the effect of
non-cash charges associated with stock based compensation and
amortization of intangibles assets) stood at 70.5% in the
reported quarter, up 160 basis points (bps) year over year.
Selling, general and administrative (SG&A) expenses were
down 5.7% to $69.8 million, while research and development
expenses increased 7.3% to $54.1 million. Adjusted operating
margin during the quarter was 26.4% compared to 18.6% in the
Illumina exited the quarter with cash and cash equivalents and
short-term investment of $1.23 billion compared with $1.19
billion at the end of fiscal 2011. The company generated $51
million in cash flow from operations in the third quarter versus
$91 million in the prior-year period.
Based on its solid cash balance, Illumina repurchased shares
of $25 million under its earlier announced share repurchase
Illumina tightened its fiscal 2012 revenue guidance to
$1.134-$1.144 billion (previous guidance was $1.10 - $1.175
billion). The company also narrowed its adjusted EPS guidance to
$1.54-$1.59 ($1.50-$1.60). The Zacks Consensus Estimates for 2012
revenues and EPS are $1.14 billion and $1.58, respectively, which
are within the guidance range.
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. The company primarily
Life Technologies Corporation
) in the sequencing market.
Currently, Illumina retains a short-term Zacks #2 Rank (Buy
ILLUMINA INC (ILMN): Free Stock Analysis
LIFE TECHNOLOGS (LIFE): Free Stock Analysis
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