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Goldman Sachs Adjusts Illumina EPS, Revenue Estimates

By a GenomeWeb Staff Reporter

NEW YORK (GenomeWeb News) – Investment bank Goldman Sachs today revised revenue and earnings per share estimates for Illumina for the next three years to "reflect our updated view on quarterly revenue pacing, recent financing activities, and corresponding share repurchase."

For 2011, analyst Isaac Ro lowered revenue estimates to slightly less than $1.13 billion from an earlier estimate of slightly more than $1.13 billion, but maintained EPS of $1.48. For 2012, he increased revenue estimates by about $700,000 to $1.44 billion and raised EPS to $2.03 from $2.

He raised 2013 revenue estimates to $1.73 billion from $1.72 billion and EPS to $2.62 from $2.58.

In a research note, Ro said that the expanded production of Illumina's HiSeq sequencing platform is expected to result in sequential revenue growth in the first and second quarters of 2011. In the third quarter, however, revenue growth is "likely" to abate "as the existing backlog is worked down."

He added, "We also anticipate a slight [second quarter] slowdown in the array franchise ahead of new product launches."

On the Japanese earthquake and tsunami, Ro said that he foresees no material impact on Illumina as the firm has said that key component supplies are sufficient through the first half of this year. "Our checks also suggest Illumina's optics supplier will not face meaningful production halts," he added.

In 2009 Illumina acquired an equity stake in Oxford Nanopore Technologies, which is developing a real-time, single molecule, nanopore-based sequencing method. Ro said that the UK firm "continues to make progress" in its development work, and noted a software deal struck last month with Accelrys for the analysis of complex real-time data.

"While performance metrics remain unavailable, we believe recent updates from the company and the increasing focus on software development suggest alpha systems could emerge in the coming months," Ro said.

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