Company Update (NASDAQ:ILMN): Illumina, Inc. Reports Strong Start to Fiscal Year 2015


Illumina, Inc. (NASDAQ:ILMN) announced its financial results for the first quarter of fiscal year 2015.

First quarter 2015 results:

  • Revenue of $539 million, a 28% increase compared to $421 million in the first quarter of 2014, and an increase of 33% on a constant currency basis
  • GAAP net income for the quarter of $137 million, or $0.92 per diluted share, compared to $60 million, or $0.40 per diluted share, for the first quarter of 2014
  • Non-GAAP net income for the quarter of $135 million, or $0.91 per diluted share, compared to $80 million, or $0.53 per diluted share, for the first quarter of 2014 (see the table entitled “Itemized Reconciliation Between GAAP and Non-GAAP Net Income” for a reconciliation of these GAAP and non-GAAP financial measures)
  • Cash flow from operations of $67 million and free cash flow of $30 million for the quarter

Gross margin in the first quarter of 2015 was 69.6% compared to 66.1% in the prior year period. Excluding the effect of non-cash stock compensation expense, amortization of acquired intangible assets and legal contingencies, non-GAAP gross margin was 72.2% for the first quarter of 2015 compared to 70.4% in the prior year period.

Research and development (R&D) expenses for the first quarter of 2015 were $91.8 million compared to $77.0 million in the prior year period. R&D expenses included $11.3 million and $11.7 million of non-cash stock compensation expense in the first quarters of 2015 and 2014, respectively. Excluding these charges and contingent compensation, R&D expenses as a percentage of revenue were 14.9% compared to 15.5% in the prior year period.

Selling, general and administrative (SG&A) expenses for the first quarter of 2015 were $116.3 million compared to $109.6 million in the prior year period. SG&A expenses included $18.0 million and $19.4 million of non-cash stock compensation expense in the first quarters of 2015 and 2014, respectively. Excluding these charges, amortization of acquired intangible assets, and contingent compensation, SG&A expenses as a percentage of revenue were 18.0% compared to 19.9% in the prior year period.

Depreciation and amortization expenses were $30.1 million and capital expenditures were $36.6 million during the first quarter of 2015. The Company ended the quarter with $1.37 billion in cash, cash equivalents and short-term investments, compared to $1.34 billion as of December 28, 2014.

“In the first quarter we delivered significant earnings growth as a result of strong demand for products across our sequencing portfolio,” stated Jay Flatley, CEO. “While the genomics market remains nascent, our best-in-class product offerings are accelerating adoption, setting the stage for a robust 2015.”

Updates since our last earnings release:

  • Launched TruSight® HLA, a complete, end-to-end solution that produces a comprehensive view of the HLA region for accurate HLA typing
  • Launched the NeoPrep™ Library Prep System, which greatly simplifies library preparation and delivers high-quality sequencing-ready libraries for next-generation sequencing
  • Announced that Berry Genomics has received premarket clearance from the Chinese Food and Drug Administration for the NextSeq CN500, a high throughput sequencing instrument based on the NextSeq® 500, as well as premarket clearance for its non-invasive prenatal testing detection kit for trisomies 13, 18 and 21
  • Entered into a strategic collaboration with Merck Serono to develop a universal NGS-based oncology diagnostic
  • Announced that the new Illumina Accelerator Boost Capital had secured an initial capital commitment of $40 million from Viking Global Investors, a privately owned, global investment firm
  • Repurchased $35 million of common stock under our previously announced share repurchase program

Financial outlook and guidance

The non-GAAP financial guidance discussed below reflects certain pro forma adjustments to assist in analyzing and assessing our core operational performance. Please see our Reconciliation of Non-GAAP Financial Guidance included in this release for a reconciliation of the GAAP and non-GAAP financial measures.

For fiscal 2015, the Company continues to project approximately 20% total revenue growth, which now includes a 3% negative impact from foreign exchange assuming current currency exchange rates. The Company has increased its projections for non-GAAP earnings per diluted share to $3.36 to $3.42. These projections assume a pro forma tax rate of approximately 27%. (Original Source)

Shares of Illumina closed today at $199.31, up $6.13 or 3.17%. ILMN has a 1-year high of $213.33 and a 1-year low of $128.38. The stock’s 50-day moving average is $190.26 and its 200-day moving average is $187.67.

On the ratings front, Illumina has been the subject of a number of recent research reports. In a report issued on March 31, BTIG analyst Dane Leone maintained a Buy rating on ILMN, with a price target of $240, which represents a potential upside of 23.4% from where the stock is currently trading. Separately, on February 2, Cantor Fitzgerald’s Sung Ji Nam maintained a Hold rating on the stock and has a price target of $166.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Dane Leone and Sung Ji Nam have a total average return of 10.1% and 16.6% respectively. Leone has a success rate of 72.0% and is ranked #1018 out of 3575 analysts, while Nam has a success rate of 91.4% and is ranked #373.

The street is mostly Bullish on ILMN stock. Out of 18 analysts who cover the stock, 14 suggest a Buy rating and 4 recommend to Hold the stock. The 12-month average price target assigned to the stock is $213.90, which represents a potential upside of 10.0% from where the stock is currently trading.

Illumina Inc providessequencing-and array-based solutions for genetic analysis. Itsproducts enabled researchers to explore DNA, helping them create the first map of gene variations associated with health, disease, and drug response.

Stay Ahead of Everyone Else

Get The Latest Stock News Alerts