NEW YORK (GenomeWeb News) – Illumina reported after the close of the market Thursday that its fourth-quarter revenues grew 12 percent year over year, easily beating analysts' consensus estimate, as stock compensation and costs related to an acquisition bit into its profit.
The San Diego-based firm brought in total revenues of $180.6 million for the three-month period ended Jan. 3, 2010, compared to $160.9 million for the fourth quarter of 2008. Its product revenues increased to $167.5 million compared to $152.8 million, and its service and other revenue rose to $13 million from $8.1 million year over year.
Illumina noted that its revenues were affected by one extra week of operating activity compared to the 2008 fourth quarter due to the structure of its financial reporting calendar.
"The market for next-generation sequencing continues to show unprecedented strength and the array market is improving as we’ve gained better visibility in the funding in the US," Illumina President and CEO Jay Flatley said during a conference call. "We exited 2009 with the largest backlog in the company’s history and entered 2010 with what we believe to be the most exciting and innovative product portfolio in genetic analysis."
Illumina SVP of Corporate Development and CFO Christian Henry said during the call that strong growth for its next-generation sequencing instruments was offset by lower sales of array instruments during the quarter. He said that total instrument sales were $61 million, up 19 percent from $51 million for the fourth quarter of 2008.
Flatley also noted during the call that the firm received $16 million from orders associated with stimulus funding.
He also said that the firm saw strong growth for its whole-genome genotyping products, a market that was sagging in previous quarters. "We're very encouraged by the Q4 trend in GWAS, but with only one quarter of recovery we're retaining a cautious outlook for the next several quarters," said Flatley.
The firm's profit for the quarter was $11.7 million, or $.09 per share, compared to $26.1 million, or $.20 per share, for Q4 2008. The most recent quarter's results were affected by a $10 million charge for acquired in-process R&D associated with last year's purchase of Avantome, as well as $16.5 million in stock compensation expense. Its adjusted EPS, which includes stock compensation expense, was $.21 per share.
Illumina beat analysts' consensus estimates for revenues of $173 million and EPS of $.19 for the quarter.
Illumina's R&D spending increased 43 percent to $40.4 million from $28.3 million, while its SG&A spending jumped 26 percent to $49.5 million $39.2 million year over year.
For full-year 2009, Illumina generated total revenues of $666.3 million, up 16 percent from $573.2 million for 2008. Its product revenues were $627.2 million versus $532.4 million, and its service and other revenues were $39.1 million, down slightly from $40.8 million. It beats analysts' expectations of $658.4 million.
The firm's profit for the year was $72.3 million, or $.53 per share, compared to $39.4 million, or $.30 per share, for 2008. The 2009 bottom line was affected by $6.7 million in amortization of intangible assets and $11.3 million acquired in-process R&D, compared to $35.1 million in such charges for 2008. On a Non-GAAP basis, Illumina's EPS for 2009 was $1.11 per share compared to $.93 for 2008.
R&D spending for 2009 jumped to $141 million from $100 million, while SG&A spending was $176.3 million versus $148 million.
Illumina finished the year with $144.6 million in cash and cash equivalents and $548.9 million in short-term investments.
Company officials expect 2010 revenue growth of around 20 percent, with non-GAAP EPS of between $.90 and $1.00.