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Illumina (ILMN) Beats Earnings and Revenue Estimates in Q3
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Illumina, Inc. (ILMN - Free Report) reported adjusted earnings per share (EPS) of $1.52 in the third quarter of 2018, beating the Zacks Consensus Estimate of $1.25 by 21.6%. Also, the bottom line improved from the year-ago number by 36.9%.
Including one-time items, the company reported EPS of $1.33 compared with $1.11 a year ago.
Revenues
In the quarter under review, Illumina's revenues rose 19.5% year over year to $853 million. The top line surpassed the Zacks Consensus Estimate by 3.4% on strong consumables growth across Illumina’s sequencing portfolio with strength in all throughput categories and strong microarray business.
Moreover, the NovaSeq platform continued to show strong momentum on strong performance by the S1, S2 and S4 flow cells. Riding on NovaSeq platform’s strength, the company recorded sequencing system revenues of $138 million — the strongest since 2015.
Product revenues (83.2% of total revenues) increased 19.1% year over year to $710 million, and Service and Other (16.8%) revenues were up 21.2% year over year to $143 million.
Operational Update
Adjusted gross margin (excluding amortization of acquired intangible assets) came in at 71.2%, reflecting an expansion of 240 basis points (bps) year over year owing to a favorable product mix within sequencing consumables.
Research and development expenses rose 18.7% year over year to $159 million, and selling, general & administrative expenses increased 18% to $197 million. The adjusted operating margin of 29.4% expanded 280 bps from a year ago.
Financial Update
Illumina exited the third quarter with cash and cash equivalents plus short-term investments of $3.39 billion, up 35.1% from $2.51 billion at the end of second-quarter 2018. For the first nine months of 2018, net cash provided by operating activities as of Sep 30, 2018, was $842 million compared with $581 million as of Oct 1, 2017.
2018 Guidance Updated
Illumina has maintained its full-year revenue growth expectation at around 20%. Meanwhile, the Zacks Consensus Estimate for the metric is pegged at $3.31 billion.
Adjusting for certain net specified items for the full year, EPS is now expected in the band of $5.70-$5.75, showing a rise from the earlier forecast of $5.35-$5.45. The consensus mark for the earnings is at $5.46, below the projected range.
Our Take
Illumina exited the third quarter of 2018 with a year-over-year increase in both the counts. Moreover, the company received regulatory approval for its next-generation sequencing (NGS) system — MiSeqDx. Notably, it is Illumina’s first NGS system to be approved by the National Medical Products Administration in China.
Responding to customer requests for supporting high-throughput sequencing for whole exome, RNA and single-cell sequencing, Illumina released the S4 200 cycle kit for the NovaSeq platform in the quarter.
While improving margins buoy optimism, the company is operating in a tough competitive landscape.
Zacks Rank & Key Picks
Illumina currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader medical space are Amedisys, Inc. (AMED - Free Report) , Baxter International Inc (BAX - Free Report) and Masimo Corporation (MASI - Free Report) .
Amedisys is expected to release third-quarter 2018 results on Oct 29. The Zacks Consensus Estimate for adjusted EPS is 79 cents and for revenues is $410.2 million. The stock carries a Zacks Rank of 1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Baxter is expected to release third-quarter 2018 results on Oct 31. The Zacks Consensus Estimate for EPS is pegged at 74 cents and for revenues at $2.79 billion. The stock has a Zacks Rank #2 (Buy).
Masimo is slated to release third-quarter 2018 results on Oct 31. The Zacks Consensus Estimate for EPS is pinned at 68 cents and for revenues at $206.3 million. The company is a Zacks #2 Ranked player.
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Illumina (ILMN) Beats Earnings and Revenue Estimates in Q3
Illumina, Inc. (ILMN - Free Report) reported adjusted earnings per share (EPS) of $1.52 in the third quarter of 2018, beating the Zacks Consensus Estimate of $1.25 by 21.6%. Also, the bottom line improved from the year-ago number by 36.9%.
Including one-time items, the company reported EPS of $1.33 compared with $1.11 a year ago.
Revenues
In the quarter under review, Illumina's revenues rose 19.5% year over year to $853 million. The top line surpassed the Zacks Consensus Estimate by 3.4% on strong consumables growth across Illumina’s sequencing portfolio with strength in all throughput categories and strong microarray business.
Moreover, the NovaSeq platform continued to show strong momentum on strong performance by the S1, S2 and S4 flow cells. Riding on NovaSeq platform’s strength, the company recorded sequencing system revenues of $138 million — the strongest since 2015.
Illumina, Inc. Price, Consensus and EPS Surprise
Illumina, Inc. Price, Consensus and EPS Surprise | Illumina, Inc. Quote
Product revenues (83.2% of total revenues) increased 19.1% year over year to $710 million, and Service and Other (16.8%) revenues were up 21.2% year over year to $143 million.
Operational Update
Adjusted gross margin (excluding amortization of acquired intangible assets) came in at 71.2%, reflecting an expansion of 240 basis points (bps) year over year owing to a favorable product mix within sequencing consumables.
Research and development expenses rose 18.7% year over year to $159 million, and selling, general & administrative expenses increased 18% to $197 million. The adjusted operating margin of 29.4% expanded 280 bps from a year ago.
Financial Update
Illumina exited the third quarter with cash and cash equivalents plus short-term investments of $3.39 billion, up 35.1% from $2.51 billion at the end of second-quarter 2018. For the first nine months of 2018, net cash provided by operating activities as of Sep 30, 2018, was $842 million compared with $581 million as of Oct 1, 2017.
2018 Guidance Updated
Illumina has maintained its full-year revenue growth expectation at around 20%. Meanwhile, the Zacks Consensus Estimate for the metric is pegged at $3.31 billion.
Adjusting for certain net specified items for the full year, EPS is now expected in the band of $5.70-$5.75, showing a rise from the earlier forecast of $5.35-$5.45. The consensus mark for the earnings is at $5.46, below the projected range.
Our Take
Illumina exited the third quarter of 2018 with a year-over-year increase in both the counts. Moreover, the company received regulatory approval for its next-generation sequencing (NGS) system — MiSeqDx. Notably, it is Illumina’s first NGS system to be approved by the National Medical Products Administration in China.
Responding to customer requests for supporting high-throughput sequencing for whole exome, RNA and single-cell sequencing, Illumina released the S4 200 cycle kit for the NovaSeq platform in the quarter.
While improving margins buoy optimism, the company is operating in a tough competitive landscape.
Zacks Rank & Key Picks
Illumina currently carries a Zacks Rank #3 (Hold). A few better-ranked stocks in the broader medical space are Amedisys, Inc. (AMED - Free Report) , Baxter International Inc (BAX - Free Report) and Masimo Corporation (MASI - Free Report) .
Amedisys is expected to release third-quarter 2018 results on Oct 29. The Zacks Consensus Estimate for adjusted EPS is 79 cents and for revenues is $410.2 million. The stock carries a Zacks Rank of 1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.
Baxter is expected to release third-quarter 2018 results on Oct 31. The Zacks Consensus Estimate for EPS is pegged at 74 cents and for revenues at $2.79 billion. The stock has a Zacks Rank #2 (Buy).
Masimo is slated to release third-quarter 2018 results on Oct 31. The Zacks Consensus Estimate for EPS is pinned at 68 cents and for revenues at $206.3 million. The company is a Zacks #2 Ranked player.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
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