NEW YORK (GenomeWeb News) – Just days after fending off an attempt by Roche to take control of its board of directors, Illumina reported after the close of the market Monday that its first-quarter revenues declined 3 percent year over year.
The San Diego-based genetic analysis tools firm had total revenues of $272.8 million for the three-month period ended April 1. That figure is slightly better than the $270 million in preliminary revenues Illumina reported earlier this month and ahead of analysts' consensus estimate of $264.3 million. However, the revenues were down 3 percent year over year from $282.5 million.
On a conference call following the release of the financial results, Illumina CFO Marc Stapley noted that the year-ago quarter included a significant number of HiSeq shipments associated with the firm's Genome Analyzer trade-in program.
He said that instrument revenue for the first quarter was $80 million, essentially flat on a sequential basis and down 30 percent year over year due to the trade-in program and a decrease in microarray instrumentation sales. Consumables revenue was $173 million for the quarter, up 20 percent sequentially and 17 percent year over year.
The firm's services and other revenues were $17 million for the quarter, up from $16 million for Q1 2011.
"The positive trends we saw in Q4 continued in the first quarter as both microarray and sequencing revenue grew sequentially," Illumina President and CEO Jay Flatley said on the call. "Overall, we feel the global funding environment is stable. We're seeing more traditional buying patterns in the US, Europe is growing, and Asia is particularly strong, with Japan exhibiting a funding and business resurgence."
He noted that for the first time in the company's history revenues derived from Asia were higher than revenues from Europe.
Flatley said the firm remains cautious on the US market, as the NIH budget for 2013 is uncertain. "We believe the overall funding dynamics this year are considerably more favorable than last year," he said. "Our top US genome centers are not facing additional budget cuts, as they did in Q3 last year, and given that they're at the beginning of their full-year budget cycle, we do not expect these customers to be appreciably impacted in the back half."
Illumina posted net income of $26.2 million, or $.20 per share, for the quarter, compared to $24.1 million, or $.16 per share, for Q1 2011. On a non-GAAP basis, its EPS was $.36, compared to $.35, and better than Wall Street's expectation of $.32.
The firm's R&D spending dipped 3 percent to $48.8 million from $50.2 million, while its SG&A spending increased around 3 percent to $68 million from $65.7 million. Other costs incurred during the quarter included $8.1 million associated with Roche's hostile takeover bid, $2.6 million in restructuring charges, $2.1 million tied to its headquarters relocation, and $1.7 million in acquisition-related expense.
The release of the results comes less than a week after Roche decided that it wouldn't extend its tender offer to acquire Illumina. Roche had initially bid $44.50 per share and subsequently raised its offer to $51 per share, for a total price tag of $6.7 billion. But Illumina rejected Roche's overtures, calling the offers inadequate, and took the extra step of implementing a poison pill provision as a defense against a hostile takeover.
Roche had countered by nominating a slate of candidates for election at Illumina's annual shareholder meeting last week, but that effort failed, leading Roche to step back from its pursuit. Many analysts still believe a deal could get done this year, but others have noted that Roche has other potential options in pursuing a sequencing technologies player.
Illumina finished the quarter with $260.2 million in cash and cash equivalents, and $1 billion in short-term investments.
The company said that its board of directors has authorized a $250 million stock repurchase program.
Illumina reaffirmed its fiscal-year 2012 guidance for revenues of between $1.1 billion and $1.18 billion, with non-GAAP EPS of $1.40-$1.50.
"While some uncertainty exists with respect to academic and research funding in the second half of the year, we have built backlog for the 3rd consecutive quarter and our full-year outlook is generally as we anticipated," Flatley added in a statement.
He said on the call that the firm remains on track to submit its MiSeq platform to the US Food and Drug Administration by the end of the year for marketing clearance in clinical diagnostic applications.
"We began active discussions with approximately 100 clinical customers interested in using MiSeq for diagnostic applications," said Flatley. "Greater than half the orders for MiSeq are now from non-academics, unlike HiSeq which is predominantly ordered by academic customers."
In Tuesday morning trade on the Nasdaq, shares of Illumina were down a fraction of 1 percent at $43.74.