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Illumina Q2 Revenues Rise 10 Percent

NEW YORK (GenomeWeb) – Illumina reported after the close of the market on Tuesday that its second quarter revenues rose 10 percent compared to the year-ago quarter.

Illumina reported total revenues of $662.0 million in the quarter, up from $600.0 million in Q2 2016, and beating analysts' average estimate of $642.4 million.

Product revenues rose nearly 7 percent to $543.0 million from $510.0 million in Q2 2016, and service and other revenues jumped 32 percent to $119.0 million from $90.0 million in last year's quarter. Product revenues included an 8 percent rise in instrument revenue to $136.0 million and a 6 percent rise in consumable revenue to $402.0 million. Revenues from Illumina's microarray business, which include both products and services, grew 16 percent to $110.0 million, driven by the direct-to-consumer market.

"We are pleased with our strong Q2 results," Illumina CEO Francis deSouza said in a statement. "Interest in the NovaSeq platform exceeded our expectations during the quarter."

On a conference call following the release of the earnings, deSouza said Illumina shipped and installed around 80 NovaSeq instruments in Q2, and, customers have ordered more than 230 NovaSeqs since Illumina first launched it earlier this year.

Illumina's Q2 net income grew to $128.0 million, or $.87 per share, from $120.0 million, or $.82 per share, in Q2 2016. On an adjusted basis, the firm reported net income of $.82 per share, beating Wall Street's EPS estimate of $.69.

The firm's Q2 R&D expenses rose 4 percent to $130.0 million from $125.0 million in Q2 2016, 1.5 percent of which was attributable to expenses from Grail and Helix. Its SG&A expenses rose 14 percent to $169.0 million from $148.0 million a year earlier, 1.1 percent of which was due to Grail and Helix.

Illumina ended the quarter with $1.22 billion in cash and cash equivalents, and $674.0 million in short-term investments.

As a result of the higher-than-expected demand for NovaSeq, deSouza said, Illumina updated its 2017 revenue growth projections. The company now expects 12 percent revenue growth for the year, as well as earnings of $5.36 to $5.46 per share, and adjusted earnings of $3.60 to $3.70 per share. Analysts are expecting earnings of $3.63 per share for the year.

Illumina's shares rose 13 percent to $194.83 in Wednesday morning trading on the Nasdaq.