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Illumina Q1 Revenues Increase 2 Percent

NEW YORK – Illumina said after the close of the market on Thursday that its first quarter revenues rose 2 percent, driven by growth in sequencing consumables and service revenue, which were offset by declines in sequencing systems revenues.

The San Diego-based genomics technology firm recognized Q1 revenues of $859 million, compared to $846 million in Q1 2019 and beating analysts' average estimate of $854 million. Earlier this month, Illumina said it expected approximately $858 million in first quarter revenues.

Product revenue for the quarter totaled $701 million, up from $667 million a year ago, and service and other revenue amounted to $158 million, down from $179 million a year ago.

On a conference call following the release of the financial results, Illumina CEO Francis deSouza said that sequencing revenues totaled $760 million, including instrument revenue of $79 million, and were down 25 percent year over year. Consumables revenues were $553 million, up 15 percent over Q1 2019.

Sequencing consumables revenues were "stronger than expected," he said, noting that was about half of that difference was driven by customers stocking up on reagents due to COVID-19 Illumina CFO Sam Samad later added that stocking contributed about $4 million to revenues; however, late in the quarter sequencing systems shipments slowed due to the coronavirus pandemic, with a negative impact of $24 million.

Sequencing services and other revenues were $128 million, up 13 percent year over year, driven by higher licensing revenue related to in vitro diagnostics deals.

Array revenues were $99 million, down 33 percent from a year ago, and included $30 million of array services revenues.

By region, China revenues were $84 million; Europe, Middle East, and Africa revenues were $221 million; revenues from the Americas were $477 million; and Asia, Pacific, and Japan revenues were a record $77 million, "the highest total revenue ever recorded for that region," deSouza said.

Net income for the quarter was $173 million, or $1.17 per share, compared to $233 million, or $1.57 per share in Q1 2019. Wall Street analysts had estimated EPS at $1.25.

Illumina's R&D expenses fell 8 percent to $156 million from $169 million in Q1 2019. SG&A expenses increased 30 percent to $274 million from $211 million a year ago.

Illumina withdrew is 2020 revenue guidance earlier this year, due to the uncertainty surrounding the coronavirus pandemic, and declined to offer second quarter guidance. However, company officials said they expected COVID-19 impacts to be "substantially greater" in Q2 than in Q1, with lower revenues in every region worldwide.

Samad noted that the firm spent $187 million on share repurchases during the quarter. The firm also spent $132 million on payments related to the termination of its deal to acquire Pacific Biosciences.

As of March 29, Illumina had $2.0 billion in cash and cash equivalents and $1.3 billion in short-term investments.

In morning trading on the Nasdaq, Illumina shares were down 4 percent at $307.11.