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Illumina, Inc.’s (ILMN - Free Report) third-quarter 2019 adjusted earnings per share (EPS) of $1.93 surpassed the Zacks Consensus Estimate by 37.9%. Moreover, the bottom line improved 26.9% from the year-ago quarter’s figure.
Including one-time items, the company reported EPS of $1.58, up 18.8% year over year.
Revenues
In the quarter under review, Illumina’s revenues rose 6.3% year over year to $907 million. The top line also surpassed the Zacks Consensus Estimate by 4%. The year-over-year growth can be attributed to the company’s collaborations to develop distributable clinical IVDs for Illumina sequencers.
Sequencing consumable revenues were $525 million in the reported quarter, up 11% year over year. Sequencing systems revenues were $142 million, slightly up from the year-ago quarter’s figures.
During the third quarter, HiSeq consumables declined due to customers’ transition to NovaSeq. Nevertheless, the overall high throughput consumables portfolio witnessed sequential and year-over-year growth. NextSeq shipments witnessed sequential and year-over-year growth on placement of record number of NextSeq Dx Systems in the quarter.
Margins
Adjusted gross margin (excluding amortization of acquired intangible assets) was 72.4% in the reported quarter, up 126 basis points (bps) year over year.
Research and development expenses declined 5% year over year to $151 million and selling, general & administrative expenses fell 4.1% to $189 million. Operating margin came in at 34.9%, reflecting a surge of 553 bps year over year.
Financial Update
Illumina exited the third quarter of 2019 with cash and cash equivalents plus short-term investments of $3.17 billion, almost flat on a sequential basis. Year-to-date net cash provided by operating activities was $608 million compared with $842 million from the year-ago quarter’s level.
2019 Guidance
Illumina has updated its 2019 view. The company continues to expect revenue growth to be around 6% (unchanged from the earlier projection). The Zacks Consensus Estimate for 2019 revenues is pegged at $3.53 billion.
Adjusting for certain net specified items with respect to the full year, EPS is estimated in the range of $6.40-$6.45 compared with the earlier projection of $6-$6.10. The consensus mark for earnings is pegged at $6.04, which lies below the projected range. This outlook excludes any impact from the pending acquisition of Pacific Biosciences that is expected to be concluded by Dec 31, 2019.
Our Take
Illumina exited the third quarter of 2019 on an impressive note, with earnings and revenues beating the respective Zacks Consensus Estimates. It is encouraging to note that top-line growth was witnessed across the company’s high and low throughput categories. Raised 2019 EPS guidance indicates that this bullish trend will continue through the rest of the year.
Illumina continues to showcase robust performance across a broad range of sequencing applications. The recently-formed partnerships with QIAGEN and Adaptive Biotechnologies regarding IVD test kits buoy optimism. Collaboration with Broad Institute to develop open-source genomic secondary analysis tools is expected to provide a major boost.
On the flip side, a year-over-year decline in selling, general and administrative costs as well as research and development costs are concerns.
Zacks Rank & Key Picks
Illumina currently carries a Zacks Rank #3 (Hold).
ResMed reported first-quarter fiscal 2020 adjusted EPS of 93 cents, which beat the Zacks Consensus Estimate by 6.9%. Revenues of $681.1 million outpaced the consensus mark by 3.7%.
Intuitive Surgical’s third-quarter 2019 adjusted EPS of $3.43 exceeded the Zacks Consensus Estimate by 15.9%. Revenues totaled $1.13 billion, which surpassed the consensus mark of $1.06 billion.
Thermo Fisher delivered third-quarter 2019 adjusted EPS of $2.94, which topped the Zacks Consensus Estimate by 2.1%. Revenues of $6.27 billion beat the consensus mark by 1.3%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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Illumina (ILMN) Beats Q3 Earnings Estimates, Raises View
Illumina, Inc.’s (ILMN - Free Report) third-quarter 2019 adjusted earnings per share (EPS) of $1.93 surpassed the Zacks Consensus Estimate by 37.9%. Moreover, the bottom line improved 26.9% from the year-ago quarter’s figure.
Including one-time items, the company reported EPS of $1.58, up 18.8% year over year.
Revenues
In the quarter under review, Illumina’s revenues rose 6.3% year over year to $907 million. The top line also surpassed the Zacks Consensus Estimate by 4%. The year-over-year growth can be attributed to the company’s collaborations to develop distributable clinical IVDs for Illumina sequencers.
Illumina, Inc. Price, Consensus and EPS Surprise
Illumina, Inc. price-consensus-eps-surprise-chart | Illumina, Inc. Quote
Segment Details
Sequencing consumable revenues were $525 million in the reported quarter, up 11% year over year. Sequencing systems revenues were $142 million, slightly up from the year-ago quarter’s figures.
During the third quarter, HiSeq consumables declined due to customers’ transition to NovaSeq. Nevertheless, the overall high throughput consumables portfolio witnessed sequential and year-over-year growth. NextSeq shipments witnessed sequential and year-over-year growth on placement of record number of NextSeq Dx Systems in the quarter.
Margins
Adjusted gross margin (excluding amortization of acquired intangible assets) was 72.4% in the reported quarter, up 126 basis points (bps) year over year.
Research and development expenses declined 5% year over year to $151 million and selling, general & administrative expenses fell 4.1% to $189 million. Operating margin came in at 34.9%, reflecting a surge of 553 bps year over year.
Financial Update
Illumina exited the third quarter of 2019 with cash and cash equivalents plus short-term investments of $3.17 billion, almost flat on a sequential basis. Year-to-date net cash provided by operating activities was $608 million compared with $842 million from the year-ago quarter’s level.
2019 Guidance
Illumina has updated its 2019 view. The company continues to expect revenue growth to be around 6% (unchanged from the earlier projection). The Zacks Consensus Estimate for 2019 revenues is pegged at $3.53 billion.
Adjusting for certain net specified items with respect to the full year, EPS is estimated in the range of $6.40-$6.45 compared with the earlier projection of $6-$6.10. The consensus mark for earnings is pegged at $6.04, which lies below the projected range. This outlook excludes any impact from the pending acquisition of Pacific Biosciences that is expected to be concluded by Dec 31, 2019.
Our Take
Illumina exited the third quarter of 2019 on an impressive note, with earnings and revenues beating the respective Zacks Consensus Estimates. It is encouraging to note that top-line growth was witnessed across the company’s high and low throughput categories. Raised 2019 EPS guidance indicates that this bullish trend will continue through the rest of the year.
Illumina continues to showcase robust performance across a broad range of sequencing applications. The recently-formed partnerships with QIAGEN and Adaptive Biotechnologies regarding IVD test kits buoy optimism. Collaboration with Broad Institute to develop open-source genomic secondary analysis tools is expected to provide a major boost.
On the flip side, a year-over-year decline in selling, general and administrative costs as well as research and development costs are concerns.
Zacks Rank & Key Picks
Illumina currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader medical space are ResMed, Inc. (RMD - Free Report) , Intuitive Surgical, Inc. (ISRG - Free Report) and Thermo Fisher Scientific Inc. (TMO - Free Report) . All the three stocks carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 (Strong Buy) Rank stocks here.
ResMed reported first-quarter fiscal 2020 adjusted EPS of 93 cents, which beat the Zacks Consensus Estimate by 6.9%. Revenues of $681.1 million outpaced the consensus mark by 3.7%.
Intuitive Surgical’s third-quarter 2019 adjusted EPS of $3.43 exceeded the Zacks Consensus Estimate by 15.9%. Revenues totaled $1.13 billion, which surpassed the consensus mark of $1.06 billion.
Thermo Fisher delivered third-quarter 2019 adjusted EPS of $2.94, which topped the Zacks Consensus Estimate by 2.1%. Revenues of $6.27 billion beat the consensus mark by 1.3%.
5 Stocks Set to Double
Each was hand-picked by a Zacks expert as the #1 favorite stock to gain +100% or more in 2020. Each comes from a different sector and has unique qualities and catalysts that could fuel exceptional growth.
Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.
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