Illumina Illuminates Results - Analyst Blog

Illumina Inc. (ILMN) has announced preliminary results for the fourth quarter and fiscal 2010. The company expects to report $260 million of revenues during the quarter, higher than the Zacks Consensus Estimate of $248 million.

Moreover, revenues for the fiscal is expected to be around $901 million, representing a 35% annualized growth and higher than the Zacks Consensus Estimate of $887 million. However, Illumina's adjusted EPS of 28 -29 cents (for the quarter) and $1.05-$1.06 (for the fiscal year), stands short of Zacks Consensus Estimate of 31 cents and $1.07, respectively.

Illumina also provided guidance for fiscal 2011. The company expects revenues and adjusted EPS to record growth of 20% and 30%, respectively, compared with expected fiscal 2010 results.

Along with preliminary results, Illumina announced the launch of MiSeq personal sequencing system that provides researchers several benefits with regard to turnaround time, accuracy, and usage. The sequencing system is expected to be priced under $125,000.

In another development, Illumina acquired Epicentre Biotechnologies, which provides nucleic acid sample preparation reagents and specialty enzymes for sequencing and microarray applications. With this deal, the company will have access to Epicentre's proprietary Nextera technology, which simplifies genetic analysis workflows and results in lower costs and better turnaround times for sequencing applications.

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.

Product revenues consist of consumables and instruments, both of which generated sales of $133 million (annualized growth of 53%) and $88 million (45%), respectively during the last reported quarter. While significant growth in sequencing products was responsible for the robust growth in consumables, the growth in instrument revenues is attributable to the success of the HiSeq 2000 instrument.

Services and other revenues, consisting of genotyping and sequencing services as well as instrument maintenance contracts, were $12.6 million, up 55.5% year over year. An increase in maintenance contracts associated with the growing installed base of sequencing systems was responsible for the growth.