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Can Solid Overall Growth Drive Illumina's (ILMN) Q2 Earnings?
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Illumina, Inc. (ILMN - Free Report) is slated to report second-quarter 2018 results, after markets close on Jul 30. In the last reported quarter, the company delivered a positive earnings surprise of 40.8%. It has an average earnings beat of 23.2% in all of the trailing four quarters. Let's see how things are shaping up prior to this announcement.
Key Catalysts
Over the last few quarters, Illumina’s product revenues have been gaining from rising demand for sequencing consumables and instruments as well as the microarray range. In the quarter under review too, the company is expected to gain from these factors.
Within consumables, the NovaSeq platform continues to witness growth with strength in the S2 and S4 flow cell. The company also launched the S2 flow cell at Advances in Genome Biology and Technology (AGBT) meeting held in mid-February. Illumina received great customer feedback and has huge expectations for its contributions to the top line in 2018. For 2018, NovaSeq shipments are projected in the range of 330-350.
Management is hopeful that launches like S4 flow cell, Xp workflow and Nextera DNA Flex library preparation kit will drive NovaSeq demand in the near term.
Considering the transition in Illumina’s high-throughput portfolio related to the NovaSeq introduction, instrument revenues have also been rising.
Accordingly, the Zacks Consensus Estimate for Product revenues is pegged at $644 million, which reflects an increase of 18.6% from the year-ago quarter’s tally.
Total Services and other revenues, which include genotyping and sequencing services, instrument maintenance contracts and revenues from oncology agreements, have been improving. The upside is being driven by strength in genotyping services courtesy of sequencing instrument maintenance contracts and increased consumer demand.
Relative to the non-invasive prenatal testing (“NIPT”) unit, the company won Dutch National contract in the fourth-quarter of 2017 along with other encouraging developments. Per management, these factors will more than double sales from this business in 2018. Moreover, the company is making progress with NIPT adoption, courtesy of continued uptake of VeriSeq NIPT Solution, which includes CE-IVD marked library prep and analysis software.
With MiniSeq and MiSeq shipments accounting for roughly 50% of the new-to-sequencing customer demand and growing NextSeq adoption with commercial customers using the platform in production settings, Illumina’s benchtop portfolio looks encouraging.
In January 2018, Illumina launched iSeq 100 Sequencing System that delivers data accuracy at a low capital cost. Investors will be watching out for the difference this device has made so far, to top-line results in the quarter to be reported.
The bullish trend is expected to be reflected in the upcoming quarterly results. The Zacks Consensus Estimate for Service and other revenues is pegged at $145 million, which shows a rise of 21.8% from the year-ago quarter’s tally.
Here are other factors that might influence Illumina’s second-quarter 2018 results:
Geographically, Illumina has been witnessing growing revenues from Europe, Latin America and the Asia-Pacific region led by sequencing instruments and consumables. Solid performance in Asia Pacific propelled by 38% shipment growth in Greater China bodes well.
Recently, management noticed an uptick in demand from customers who are attempting to set up NIPT operations in China. We believe that these developments will open channels for Illumina, thereby enhancing its business.
Although immaterial to to-be-reported quarter, the ongoing tensions between the United States and China regarding the imposition of tariffs on imports have raised concerns for major MedTech players as any adverse move can mar sales in China in the near term.
Overall, second-quarter total revenues are projected at $787.7 million, indicating a rise of 19% from the prior-year quarter’s figure.
What Our Model Suggests
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Illumina sports a Zacks Rank #1 and has an Earnings ESP of +1.11%, a combination that suggests that the company is likely to beat estimates.
The Zacks Consensus Estimate for earnings of $1.11 reflects a 35.4% rise on a year-over-year basis.
Other Stocks Worth a Look
Here are some other medical stocks worth considering as these have the right combination of elements to post an earnings beat in the to-be-reported quarter.
Baxter International Inc (BAX - Free Report) has an Earnings ESP of +0.90% and a Zacks Rank #2.
Laboratory Corporation Of America Holdings (LH - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
Image: Bigstock
Can Solid Overall Growth Drive Illumina's (ILMN) Q2 Earnings?
Illumina, Inc. (ILMN - Free Report) is slated to report second-quarter 2018 results, after markets close on Jul 30. In the last reported quarter, the company delivered a positive earnings surprise of 40.8%. It has an average earnings beat of 23.2% in all of the trailing four quarters. Let's see how things are shaping up prior to this announcement.
Key Catalysts
Over the last few quarters, Illumina’s product revenues have been gaining from rising demand for sequencing consumables and instruments as well as the microarray range. In the quarter under review too, the company is expected to gain from these factors.
Within consumables, the NovaSeq platform continues to witness growth with strength in the S2 and S4 flow cell. The company also launched the S2 flow cell at Advances in Genome Biology and Technology (AGBT) meeting held in mid-February. Illumina received great customer feedback and has huge expectations for its contributions to the top line in 2018. For 2018, NovaSeq shipments are projected in the range of 330-350.
Management is hopeful that launches like S4 flow cell, Xp workflow and Nextera DNA Flex library preparation kit will drive NovaSeq demand in the near term.
Illumina, Inc. Price and EPS Surprise
Illumina, Inc. Price and EPS Surprise | Illumina, Inc. Quote
Considering the transition in Illumina’s high-throughput portfolio related to the NovaSeq introduction, instrument revenues have also been rising.
Accordingly, the Zacks Consensus Estimate for Product revenues is pegged at $644 million, which reflects an increase of 18.6% from the year-ago quarter’s tally.
Total Services and other revenues, which include genotyping and sequencing services, instrument maintenance contracts and revenues from oncology agreements, have been improving. The upside is being driven by strength in genotyping services courtesy of sequencing instrument maintenance contracts and increased consumer demand.
Relative to the non-invasive prenatal testing (“NIPT”) unit, the company won Dutch National contract in the fourth-quarter of 2017 along with other encouraging developments. Per management, these factors will more than double sales from this business in 2018. Moreover, the company is making progress with NIPT adoption, courtesy of continued uptake of VeriSeq NIPT Solution, which includes CE-IVD marked library prep and analysis software.
With MiniSeq and MiSeq shipments accounting for roughly 50% of the new-to-sequencing customer demand and growing NextSeq adoption with commercial customers using the platform in production settings, Illumina’s benchtop portfolio looks encouraging.
In January 2018, Illumina launched iSeq 100 Sequencing System that delivers data accuracy at a low capital cost. Investors will be watching out for the difference this device has made so far, to top-line results in the quarter to be reported.
The bullish trend is expected to be reflected in the upcoming quarterly results. The Zacks Consensus Estimate for Service and other revenues is pegged at $145 million, which shows a rise of 21.8% from the year-ago quarter’s tally.
Here are other factors that might influence Illumina’s second-quarter 2018 results:
Geographically, Illumina has been witnessing growing revenues from Europe, Latin America and the Asia-Pacific region led by sequencing instruments and consumables. Solid performance in Asia Pacific propelled by 38% shipment growth in Greater China bodes well.
Recently, management noticed an uptick in demand from customers who are attempting to set up NIPT operations in China. We believe that these developments will open channels for Illumina, thereby enhancing its business.
Although immaterial to to-be-reported quarter, the ongoing tensions between the United States and China regarding the imposition of tariffs on imports have raised concerns for major MedTech players as any adverse move can mar sales in China in the near term.
Overall, second-quarter total revenues are projected at $787.7 million, indicating a rise of 19% from the prior-year quarter’s figure.
What Our Model Suggests
According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Illumina sports a Zacks Rank #1 and has an Earnings ESP of +1.11%, a combination that suggests that the company is likely to beat estimates.
The Zacks Consensus Estimate for earnings of $1.11 reflects a 35.4% rise on a year-over-year basis.
Other Stocks Worth a Look
Here are some other medical stocks worth considering as these have the right combination of elements to post an earnings beat in the to-be-reported quarter.
Align Technology, Inc. (ALGN - Free Report) sports a Zacks Rank #1 and has an Earnings ESP of +2.05%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Baxter International Inc (BAX - Free Report) has an Earnings ESP of +0.90% and a Zacks Rank #2.
Laboratory Corporation Of America Holdings (LH - Free Report) has an Earnings ESP of +0.48% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>