Illumina Hits a Lull in the First Quarter
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Illumina's (NASDAQ: ILMN) growth rate slowed considerably in the company's fourth-quarter results announced in January. However, the gene-sequencing pioneer's fundamentals remained strong. And Illumina's full-year 2019 guidance reflected solid double-digit percentage earnings growth.
Investors received an initial look at how good of a start the company had in 2019 when Illumina reported its first-quarter earnings results after the market closed on Thursday. Here are the highlights from those results.
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Illumina results: The raw numbers
| Metric | Q1 2019 | Q1 2018 | Year-Over-Year Change |
|---|---|---|---|
| Sales | $846 million | $782 million | 8.2% |
| Net income from continuing operations | $233 million | $208 million | 12% |
| Adjusted earnings per share | $1.60 | $1.45 | 10.3% |
Data source: Illumina.
What happened with Illumina this quarter?
Illumina's revenue growth certainly slowed even more in the first quarter. CFO Sam Samad mentioned in the company's fourth-quarter conference call in January that instrument sales could slip by $50 million in Q1. The actual results showed that sequencing instrument sales fell to $105 million -- a $55 million decline from the previous quarter.
Samad also predicted that Illumina's first-quarter sequencing consumables revenue would be flat to slightly higher compared to the company's fourth-quarter result. That view turned out to be on target. Illumina reported consumables revenue in the first quarter of $481 million, up 2.3% quarter over quarter and a year-over-year increase of 14%.
Illumina announced total microarrays revenue of $147 million in the first quarter. This reflected an 11.4% increase from the fourth quarter. However, microarrays revenue fell 3.3% from the prior-year period total. This sluggishness compared to early 2018 was expected. Illumina CEO Francis deSouza stated in the company's Q4 conference call that direct-to-consumer customers anticipated that their growth rates would moderate in 2019.
Trade tensions with China didn't appear to impact Illumina in the first quarter. The company posted revenue of $88 million in the Greater China region, up 14.3% from the fourth quarter and an increase of 12.8% over the prior-year period.
What management had to say
DeSouza stated, "This was a strong start to the year, with $846 million in revenue and more than $1 billion in orders for the first time in Illumina's history." He added, "Our growth is driven by a broad range of sequencing applications, with 14% sequencing consumable growth in the first quarter, including more than 20% growth in clinical sequencing consumables."