We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Illumina (ILMN) Q3 Earnings Top Estimates, 2021 Revenue View Up
Read MoreHide Full Article
Illumina, Inc.’s (ILMN - Free Report) third-quarter 2021 adjusted earnings per share (EPS) of $1.45 surpassed the Zacks Consensus Estimate by 16.9%. Moreover, the bottom line improved a stupendous 42.2% from the year-ago quarter’s earnings of $1.02.
The adjustments considered dilution from GRAIL adjusted operating loss of 19 cents per share and incremental dilution from the 9.8 million shares issued to fund the GRAIL acquisition of 6 cents per diluted share. The adjustments exclude certain amortization costs, expense and benefit related to COVID-19 and restructuring costs, among others.
Including one-time items, the company’s GAAP EPS was $2.08, surging 71.9% year over year.
Revenues
In the quarter under review, Illumina’s revenues were $1.11 billion, up 39.5% year over year. The top line also exceeded the Zacks Consensus Estimate by 6.6%.
The third-quarter revenues fell 1.6% sequentially from the last quarter’s level.
Segment Details
Post the acquisition of GRAIL on Aug 18, 2021, Illumina has two reportable segments-- Core Illumina and GRAIL.
Core Illumina revenues surged 39% year over year to $1.106 billion on record shipments for both clinical and research. Core Illumina Sequencing revenues grew 43% year over year to $1.013 billion. Sequencing revenues reflected 92% of core Illumina revenues..
Core Illumina Sequencing Consumable revenues totaled $723 million in the reported quarter, up 45% year over year on record NovaSeq consumable shipments. Notably, in the reported quarter, NovaSeq consumables shipments grew over 50% year over year.
Sequencing Instrument revenues for core Illumina were $180 million, reflecting a surge of 65% from the year-ago figure. The upside was driven by record NovaSeq shipments, which more than doubled year over year owing to greater demand in oncology testing.
Core Illumina sequencing service and other revenues were $110 million, up 11% from the year-ago quarter on higher instrument service contract revenues, which were led by growing installed base as well as gel sample growth.
GRAIL contributed $2 million to revenues during the reported quarter.
Margins
Adjusted gross margin (excluding amortization of acquired intangible assets) was 71.1% in the reported quarter, highlighting an expansion of 399 basis points (bps) year over year.
Research and development expenses increased 153.5% year over year to $436 million, whereas selling, general & administrative expenses rose a stupendous 357.8% to $879 million. These pushed up operating costs by 261.3% to $1.32 billion.
Adjusted operating loss in the quarter was $527 million against adjusted operating income of $169 million in the year-ago period.
Financial Update
Illumina exited the third quarter of 2021 with cash and cash equivalents plus short-term investments of $1.27 billion compared with $4.29 billion at the end of the second quarter.
The company did not repurchase any common stock in the quarter.
Cumulative net cash provided by operating activities at the end of the third quarter of 2021 was $263 million compared with $674 million a year ago.
2021 Guidance Updated
Illumina raised its revenue growth guidance for 2021, indicating a surge of 36% from 2020 (up from its earlier growth guidance of 32-34%). The Zacks Consensus Estimate for the same is currently pegged at $4.33 billion.
Adjusted EPS for 2021 is projected in the range of $5.50-$5.60 (down from $6.30-$6.50). The Zacks Consensus Estimate for the same is currently pegged at $6.12.
The guidance considered both Core Illumina and GRAIL segments’ expected performances.
Our Take
Illumina exited the third quarter with better-than-expected results. The robust year-over-year improvement in Core Illumina businesses looks encouraging. Contributions from the recently-concluded GRAIL acquisition also buoy optimism. NovaSeq consumable and instrument shipments reached new highs during the quarter led by oncology testing, population sequencing and drug discovery initiatives. The raised 2021 guidance for revenues instills investor confidence in the company.
However, a stupendous rise in operating expenses pushed up costs during the third quarter. The company also incurred operating losses in the reported quarter. Deterioration in the short-term cash level raises concerns. A reduction in full-year adjusted EPS guidance considered dilution from GRAIL adjusted operating loss of $1.00 and incremental dilution from the 9.8 million shares issued to fund the GRAIL acquisition of 15 cents per share.
Zacks Rank & Key Picks
Illumina currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Thermo Fisher Scientific Inc. (TMO - Free Report) , SARTORIUS (SARTF - Free Report) and West Pharmaceutical Services, Inc. (WST - Free Report) .
Thermo Fisher, carrying a Zacks Rank #1 (Strong Buy), reported third-quarter 2021 adjusted EPS of $5.76, which beat the Zacks Consensus Estimate by 23.3%. Revenues of $9.33 billion outpaced the consensus mark by 12%. You can see the complete list of today’s Zacks #1 Rank stocks here.
SARTORIUS reported third-quarter 2021 adjusted EPS of $2.55, surpassing the Zacks Consensus Estimate by 7.6%. Revenues of $1.06 billion surpassed the Zacks Consensus Estimate by 5.2%. It currently carries a Zacks Rank #2 (Buy).
West Pharmaceutical reported third-quarter 2021 adjusted EPS of $2.06, which surpassed the Zacks Consensus Estimate by 13.2%. Revenues of $706.5 million outpaced the Zacks Consensus Estimate by 3.2%. It currently carries a Zacks Rank #2.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Illumina (ILMN) Q3 Earnings Top Estimates, 2021 Revenue View Up
Illumina, Inc.’s (ILMN - Free Report) third-quarter 2021 adjusted earnings per share (EPS) of $1.45 surpassed the Zacks Consensus Estimate by 16.9%. Moreover, the bottom line improved a stupendous 42.2% from the year-ago quarter’s earnings of $1.02.
The adjustments considered dilution from GRAIL adjusted operating loss of 19 cents per share and incremental dilution from the 9.8 million shares issued to fund the GRAIL acquisition of 6 cents per diluted share. The adjustments exclude certain amortization costs, expense and benefit related to COVID-19 and restructuring costs, among others.
Including one-time items, the company’s GAAP EPS was $2.08, surging 71.9% year over year.
Revenues
In the quarter under review, Illumina’s revenues were $1.11 billion, up 39.5% year over year. The top line also exceeded the Zacks Consensus Estimate by 6.6%.
The third-quarter revenues fell 1.6% sequentially from the last quarter’s level.
Segment Details
Post the acquisition of GRAIL on Aug 18, 2021, Illumina has two reportable segments-- Core Illumina and GRAIL.
Core Illumina revenues surged 39% year over year to $1.106 billion on record shipments for both clinical and research. Core Illumina Sequencing revenues grew 43% year over year to $1.013 billion. Sequencing revenues reflected 92% of core Illumina revenues..
Illumina, Inc. Price, Consensus and EPS Surprise
Illumina, Inc. price-consensus-eps-surprise-chart | Illumina, Inc. Quote
Core Illumina Sequencing Consumable revenues totaled $723 million in the reported quarter, up 45% year over year on record NovaSeq consumable shipments. Notably, in the reported quarter, NovaSeq consumables shipments grew over 50% year over year.
Sequencing Instrument revenues for core Illumina were $180 million, reflecting a surge of 65% from the year-ago figure. The upside was driven by record NovaSeq shipments, which more than doubled year over year owing to greater demand in oncology testing.
Core Illumina sequencing service and other revenues were $110 million, up 11% from the year-ago quarter on higher instrument service contract revenues, which were led by growing installed base as well as gel sample growth.
GRAIL contributed $2 million to revenues during the reported quarter.
Margins
Adjusted gross margin (excluding amortization of acquired intangible assets) was 71.1% in the reported quarter, highlighting an expansion of 399 basis points (bps) year over year.
Research and development expenses increased 153.5% year over year to $436 million, whereas selling, general & administrative expenses rose a stupendous 357.8% to $879 million. These pushed up operating costs by 261.3% to $1.32 billion.
Adjusted operating loss in the quarter was $527 million against adjusted operating income of $169 million in the year-ago period.
Financial Update
Illumina exited the third quarter of 2021 with cash and cash equivalents plus short-term investments of $1.27 billion compared with $4.29 billion at the end of the second quarter.
The company did not repurchase any common stock in the quarter.
Cumulative net cash provided by operating activities at the end of the third quarter of 2021 was $263 million compared with $674 million a year ago.
2021 Guidance Updated
Illumina raised its revenue growth guidance for 2021, indicating a surge of 36% from 2020 (up from its earlier growth guidance of 32-34%). The Zacks Consensus Estimate for the same is currently pegged at $4.33 billion.
Adjusted EPS for 2021 is projected in the range of $5.50-$5.60 (down from $6.30-$6.50). The Zacks Consensus Estimate for the same is currently pegged at $6.12.
The guidance considered both Core Illumina and GRAIL segments’ expected performances.
Our Take
Illumina exited the third quarter with better-than-expected results. The robust year-over-year improvement in Core Illumina businesses looks encouraging. Contributions from the recently-concluded GRAIL acquisition also buoy optimism. NovaSeq consumable and instrument shipments reached new highs during the quarter led by oncology testing, population sequencing and drug discovery initiatives. The raised 2021 guidance for revenues instills investor confidence in the company.
However, a stupendous rise in operating expenses pushed up costs during the third quarter. The company also incurred operating losses in the reported quarter. Deterioration in the short-term cash level raises concerns. A reduction in full-year adjusted EPS guidance considered dilution from GRAIL adjusted operating loss of $1.00 and incremental dilution from the 9.8 million shares issued to fund the GRAIL acquisition of 15 cents per share.
Zacks Rank & Key Picks
Illumina currently carries a Zacks Rank #5 (Strong Sell).
Some better-ranked stocks in the broader medical space that have announced quarterly results are Thermo Fisher Scientific Inc. (TMO - Free Report) , SARTORIUS (SARTF - Free Report) and West Pharmaceutical Services, Inc. (WST - Free Report) .
Thermo Fisher, carrying a Zacks Rank #1 (Strong Buy), reported third-quarter 2021 adjusted EPS of $5.76, which beat the Zacks Consensus Estimate by 23.3%. Revenues of $9.33 billion outpaced the consensus mark by 12%. You can see the complete list of today’s Zacks #1 Rank stocks here.
SARTORIUS reported third-quarter 2021 adjusted EPS of $2.55, surpassing the Zacks Consensus Estimate by 7.6%. Revenues of $1.06 billion surpassed the Zacks Consensus Estimate by 5.2%. It currently carries a Zacks Rank #2 (Buy).
West Pharmaceutical reported third-quarter 2021 adjusted EPS of $2.06, which surpassed the Zacks Consensus Estimate by 13.2%. Revenues of $706.5 million outpaced the Zacks Consensus Estimate by 3.2%. It currently carries a Zacks Rank #2.