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Illumina Posts 27 Percent Jump in Revenues, Ups 2014 Forecast

NEW YORK (GenomeWeb) – Illumina reported after the close of the market Tuesday that its first quarter revenues increased 27 percent year over year.

The San Diego-based firm posted revenues of $421 million for the three months ended March 31, compared to $331 million for the first quarter of 2012. It beat the average analyst estimate of $391.8 million.

Its product revenue jumped to $362.2 million from $296.2 million year over year, and its service and other revenue increased to $58.6 million from $34.8 million.

Total instrument revenues grew 32 percent to $160 million, while revenue from consumables grew 18 percent to $243 million due to "higher demand for sequencing consumables and a growing installed base," CFO Marc Stapley said during a conference call discussing the company's Q1 results.

Revenues from the firm's sequencing business grew 36 percent, while revenues from Illumina's array business grew 4 percent driven by genotyping services and IVF applications.

"Our first quarter results have set the stage for a strong 2014," Illumina CEO Jay Flatley said in a statement. He added that the firm is "experiencing an exciting uptake of our new products, including the NextSeq 500 and HiSeq X Ten, while demand for the overall product portfolio remains robust."

In the first quarter, nine customers placed orders for the $10 million HiSeq X Ten system, "doubling our original forecasts," Flatley said on the call. One of those customers is the Wellcome Trust Sanger Institute, which Flatley also disclosed on today's call.

Illumina announced the launch of both the NextSeq 500 and HiSeq X Ten platforms earlier this year at the JP Morgan Global Healthcare Conference. At the time, Flatley said that the X Ten would enable the sequencing of a human genome for under $1,000.

"The response we've seen to the $1,000 genome reinforces our view that as far out as we can see, there's an insatiable demand for whole-genome sequencing," Flatley said.

In addition, Illumina shipped 65 NextSeq 500 systems.

Illumina posted a net profit of $60 million, or $.40 per share, for the quarter, compared to a net loss of $22.6 million, or $.18 per share, in the year ago–quarter. The Q1 2013 loss was driven by a $105.9 million charge for legal contingencies in a patent infringement dispute with Syntrix Biosystems.

On a non-GAAP basis, Illumina posted a profit of $80 million, or $.53 per share, versus a Q1 2013 non-GAAP profit of $62.6 million, or $.46 per share. It beat Wall Street estimates of $.44 per share.

Illumina's R&D spending in the quarter increased 25 percent to $77.0 million from $61.5 million, while its SG&A expenses climbed 29 percent to $109.6 million from $85.1 million.

The firm finished the quarter with $518.5 million in cash and cash equivalents and $573.3 million in short-term investments.

Illumina also increased its 2014 guidance and is now anticipating 21 percent to 23 percent growth in revenues over 2013, compared to its previous estimate of 15 percent to 17 percent growth.

In Wednesday morning trade on the Nasdaq, shares of Illumina were up more than 2 percent at $151.67.