NEW YORK (GenomeWeb News) – Illumina reported after the close of the market on Tuesday that revenues in its fourth quarter increased 25 percent year over year, including a 21 percent bump in product revenues.
The San Diego-based company said that for the last three months of 2013, it took in $387.3 million in total revenues, up from $309.3 million in the year-ago period and besting the average analyst estimate of $382.1 million.
The results were in line with what Illumina had pre-announced earlier this month.
Product revenues for the fourth quarter increased to $336.4 million from $278.9 million a year ago. Service and other revenues were up to $50.9 million, a 68 percent increase from $30.3 million in Q4 2012.
Illumina posted a profit of $80.7 million, or $.56 per share, up from year-ago figures of $71.9 million, or $.53 per share. On an adjusted basis, EPS was $.45, edging out the consensus Wall Street estimate of $.44.
Illumina upped its R&D spending 35 percent to $76.7 million from $56.9 million, and increased its SG&A spending 40 percent to $111.6 million from $79.7 million.
"The fourth quarter capped off a spectacular year for Illumina with robust performance across all products and geographies," Illumina CEO Jay Flatley said in a statement. "We made significant progress on key R&D programs which allowed us to introduce new products in early 2014 that will once again redefine the trajectory of sequencing. We plan to leverage this momentum in 2014 to more broadly enable the adoption of genomics."
Earlier this month, the company launched two new sequencing platforms, the NextSeq 500 System, which provides high-throughput performance on a desktop instrument, and the HiSeq X Ten Sequencing System, which the firm said can deliver more than five genomes per day, and which it claims has made the $1,000 genome a reality.
On a conference call following the release of the financial results, CFO Marc Stapley said that Illumina hit many records in the fourth quarter, including "record shipments of sequencing core consumables, sample prep, Fast Track service genomes, and Infinium samples."
The sequencing business grew 32 percent in the fourth quarter, driven by consumables and sequencing services. "Our results clearly demonstrate the early penetration of NGS into reproductive health, oncology, and other clinical markets, and our improving competitive position," Flatley said on the call.
During the fourth quarter, Illumina also achieved a milestone when its MiSeq platform received premarket approval from the US Food and Drug Administration, the first time a next-generation sequencing instrument has received such designation.
The company also announced on Tuesday that Decode Genetics, which was recently purchased by Amgen, would be the fifth customer of the HiSeq X Ten system.
"We've spoken with many additional customers who are interested in purchasing the system," said Flatley. And, "we're evaluating the extent to which we can ramp our supply chain to provide more systems this year."
At the recent 32nd Annual JP Morgan Healthcare Conference, Illumina said that it would likely install only five HiSeq X Ten systems in 2014.
"The demand we've seen for the $1,000 genome reinforces our view that there is, as far out as we can see, insatiable demand for whole-genome sequencing," Flatley said.
Meantime, Illumina's microarray business increased revenues 10 percent year over year in the fourth quarter driven by growth in consumables, array instruments, and genotyping services. Strength in genotyping services and instruments resulted partly from an increase in consumer samples. For the full year, the microarray business increased 3 percent.
Overall, full-year 2013 revenues were up 23 percent to $1.42 billion from $1.15 billion in 2012.
Product revenues rose 19 percent year over year to $1.26 billion from $1.06 billion, while service and other revenues were up 69 percent to $156.5 million from $92.7 million.
Its profit for the year was down to $125.3 million, or $.90 per share, compared to $151.3 million, or $1.13 per share. However, EPS of $1.80 on an adjusted basis surpassed the average Wall Street estimate of $1.78.
Its R&D costs totaled $276.7 million, a 20 percent increase from $231.0 million in 2012. SG&A spending shot up 33 percent to $381.0 million from $286.0 million.
Illumina finished 2013 with $711.6 million in cash and cash equivalents, and $454.0 million in short-term investments.
It said that for full-year 2014, it projects revenues to increase between 15 percent and 17 percent, while non-GAAP EPS is anticipated to be in the range of $2.00 to $2.06.
Illumina's stock was up around 10 percent at $154.47 in Wednesday morning trade on the Nasdaq.
Several investment firms upped their price targets on Illumina's stock following the release of the results. Leerink raised the target on Illumina to $160 from $140, Piper Jaffray raised its target to $127 from $120, and Mizuho Securities increased its target to $175 from $150.