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Illumina's Q1 Revenues Grow 8 Percent

NEW YORK (GenomeWeb) – Illumina reported after the close of the market on Thursday that its first quarter 2019 revenues rose 8 percent.

The San Diego-based genomics technology firm recognized total Q1 revenues of $846 million, compared to $782 million in Q1 2018, beating analysts' average estimate of $834.4 million.

Total Q1 2019 revenue included $667 million in product revenue and $179 million in service and other revenue. Sequencing consumables revenue was up 14 percent year over year to $481 million, while sequencing instrument revenue was down 6 percent at $105 million. Total revenues from the array business were $147 million, a 3 percent year over year decline due primarily to a slowdown in the direct-to-consumer market.

"This was a strong start to the year," Illumina CEO and President Francis deSouza said in a statement. "Our growth is driven by a broad range of sequencing applications, with 14 percent sequencing consumables growth in the first quarter, including more than 20 percent growth in clinical sequencing consumables."

During a conference call with investors, deSouza also said that as of Thursday, Helix would be deconsolidated from Illumina. Illumina will no longer hold equity in or participate on Helix's board, allowing Helix to "pursue new opportunities both in population health initiatives and for its marketplace," deSouza said. Marc Stapley, who served seven years at Illumina, most recently as executive vice president strategy and corporate development, until stepping down in January, will join Helix as CEO, he added. 

Illumina's Q1 2019 GAAP net income was $233 million, or $1.57 per share, compared to $208 million, or $1.41 per share in Q1 2019. Non-GAAP net income was $237 million, or $1.60 per share, compared to $214 million, or $1.45 per share, in Q1 2018. Wall Street analysts estimated EPS at $1.36.

Illumina's R&D expenses rose 23 percent to $169 million in Q1 2019 from $137 million in Q1 2018. SG&A expenses climbed 15 percent to $211 million from $183 million, year over year.

The company anticipates its 2019 revenues will grow between 13 percent and 14 percent to between $3.76 billion and $3.8 billion.

As a result of the Helix deconsolidation, Illumina raised its fiscal 2019 EPS guidance. It now expects GAAP EPS will be between $6.29 and $6.39 and non-GAAP EPS between $6.63 and $6.73. Previously it had anticipated GAAP and non-GAAP EPS of $6.07 to $6.17 and $6.50 to $6.60, respectively.

Sam Samad, Illumina's chief financial officer, said that Illumina had previously anticipated recognizing around $19 million in 2019 revenues attributable to Helix, but said that the expected growth in the sequencing business would offset that. In Q1 2019, Helix revenue was around $1 million.

Samad added that he anticipates Illumina's Q2 2019 revenues to grow 7 percent year over year driven by sequencing.

As of March 31, 2019, Illumina had $2.3 billion in cash and cash equivalents and $1.3 billion in short-term investments.

On Friday morning, Illumina's stock was down a little over 1 percent on the Nasdaq at $314.83.