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Illumina Inc. Reports Operating Results (10-Q)
Posted by: gurufocus (IP Logged)
Date: July 30, 2012 04:56PM
Illumina Inc. (ILMN) filed Quarterly Report for the period ended 2012-07-01. Illumina, Inc. has a market cap of $5.22 billion; its shares were traded at around $42.3 with a P/E ratio of 32.3 and P/S ratio of 5. Illumina, Inc. had an annual average earning growth of 35.1% over the past 5 years.
Highlight of Business Operations:While many of our customers receive funding from government agencies to purchase our products we are seeing less of a dependence on government funding, exemplified by MiSeq orders that are weighted more heavily to non-academic customers. However, we estimate that approximately one-third of our total revenue is derived, directly or indirectly, from funding provided by the U.S. National Institute of Health (NIH). Based on the fiscal year 2012 Congressional budget, the adjusted fiscal 2012 NIH budget increased 1% as compared to fiscal 2011 levels. The significance and timing of any reductions to the NIH budget beyond fiscal 2012 may be significantly impacted by the sequestration provisions of the Budget Control Act of 2011 and by whether these provisions remain in effect. In addition, the U.S. Department of Health and Human Services (HHS), of which the NIH is a part, has the ability to reallocate funds within its budget to spare the NIH from the full effect of HHS budget reductions. Accordingly, although there is no clarity on sequestration and the NIH budget for 2013 remains uncertain, we continue to believe that a dramatic reduction in NIH funding is unlikely. In that regard, the Obama administration has already proposed a flat NIH budget for 2013, while complying with the Budget Control Act with reductions in other areas. Also, in June 2012 the Senate Committee on Appropriations approved a $100 million increase to the NIH budget for 2013 from fiscal 2012 levels. We further believe that allocations within the NIH budget will continue to favor genetic analysis tools generally and, in particular, next-generation sequencing.
Consumables revenue increased $24.7 million, or 16%, to $183.7 million in Q2 2012 compared to $159.0 million in Q2 2011. The increase was attributable to increased sales of sequencing consumables, driven by higher consumable sales per HiSeq system and the growth of our installed base of sequencing instruments.
Instrument revenue decreased $34.5 million, or 32%, to $72.2 million in Q2 2012 compared to $106.7 million in Q2 2011, driven by a decrease in HiSeq and HiScanSQ instrument shipments, partially offset by a full quarter of MiSeq system shipments. In Q2 2011, we shipped a high volume of HiSeq 2000 units, driven by the significant backlog entering the quarter and demand from the Genome Analyzer trade-in program.
Consumables revenue increased $49.4 million, or 16%, to $356.6 million in the first half of 2012 compared to $307.2 million in the same period in 2011. The increase was primarily attributable to increased sales of sequencing consumables, driven by higher consumable sales per HiSeq system and the growth of our installed base.
Instrument revenue decreased $69.2 million, or 31%, to $151.8 million in the first half of 2012 compared to $221.0 million in the same period in 2011, driven by a decrease in HiSeq, HiScan, and HiScanSQ instrument shipments, partially offset by two full quarters of MiSeq system shipments. In the first half of 2011, we shipped a high volume of HiSeq 2000 units, driven by the significant backlog entering the period and demand from the Genome Analyzer trade-in program.
Stocks Discussed: ILMN,