Tuesday, February 2, 2010

Illumina Inc. (NASDAQ: ILMN): Q4 Earnings Preview 2009

. Tuesday, February 2, 2010

By Stock Wizard

Illumina Inc. (NASDAQ: ILMN) is scheduled to release fourth quarter 2009 earnings after the market close on Thursday, February 4, 2010. Analysts, on average, expect the company to report earnings of 19 cents a share on revenue of $172.98 million. In the year ago quarter, the company reported earnings of 25 cents per share on revenue of $160.93 million.

Illumina, Inc. engages in the development, manufacture, and marketing of integrated systems for the analysis of genetic variation and biological function. Genomics is emerging as a growing market within the life sciences sector, offering attractive growth opportunities and products that will potentially change the field of research.

In the preceding third quarter, the San Diego, California-based company posted net income of $17.1 million or $0.12 per share for the third quarter, compared to a net loss of $10.1 million or $0.08 per share a year ago. Excluding items, Illumina's adjusted net income was $32.3 million or $0.24 per share, up from $28.64 million or $0.22 per share for the third quarter of 2008. Revenue increased 5% to $158.36 million from $150.26 million reported in the third quarter of 2008. Analysts, on average, expected the company to earn $0.20 per share on revenue of $167.32 million.

Recently, Illumina said that based on management's preliminary review of quarterly financial results the company's revenue for the fourth quarter of 2009 is approximately $176 million. This compares to fourth quarter revenue guidance of a minimum of $165 million and implies fiscal year 2009 revenue of approximately $662 million or annual growth of 15%. However, the company added that this revenue estimate is preliminary and remains subject to audit by its independent registered accounting firm.

The company said that for the full year 2010 it expects non-GAAP earnings per share to be in the range of $0.90 to $1.00 and the revenue to grow by approximately 20% from the anticipated 2009 revenue of $662 million. Also, it expects gross margins in the mid to high 60s.

In the fourth quarter, the company unveiled a revolutionary new DNA sequencer, the HiSeq 2000, which has the potential to provide four times the amount of genetic information per experiment with improved performance in comparison to other products currently on the market. The machine will decode a person's DNA in one week using $10,000 worth of materials--five times cheaper than any other competing gadget on the market. Illumina has already received a record order for 128 of the new HiSeq 2000 systems from the Beijing Genomics Institute, a Chinese government research institute. Illumina is planning to ship limited quantities of its latest system in February and begin broad shipments in March.

In November, Illumina announced that its Board of Directors has approved a new stock repurchase program, authorizing the company to repurchase in the aggregate up to $100 million of its outstanding common stock.

The company's stock currently trades at a forward P/E (fye 28-Dec-10) of 37.46 and PEG Ratio (5 yr expected) of 1.99. In terms of stock performance, Illumina shares have gained 34 percent over the past year.

Full Disclosure: None.

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