Tuesday, Illumina Inc. (ILMN), a maker of tools for analysis of genes and biological function, posted a profit in the third quarter, reflecting improved revenues and the absence of a year-ago charge. However, the company lowered its outlook for fiscal 2009. Following the announcement, the stock lost nearly 17% in the after hours.
The San Diego, California-based Illumina 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.
Illumina said its recent quarter included non-cash charges of $14.6 million in stock compensation expense, $4.8 million in non-cash interest expense, and other items, while last year's included a $24.7 million in process research and development charge associated with its acquisition of Avantome, Inc.
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. On average, thirteen analysts polled by Thomson Reuters expected the company to earn $0.20 per share for the quarter. Analysts' estimates typically exclude special items.
Quarterly revenues increased 5% to $158.36 million from $150.26 million reported in the third quarter of 2008. Analysts projected revenues of $167.32 million.
In the preceding second quarter, Illumina reported net income of $24.7 million or $0.18 per share, up from $12.7 million or $0.09 per share a year ago. Adjusted net income increased to $39.4 million or $0.30 per share from $27.5 million or $0.22 per share in the same quarter of last year. Revenues grew 15% to $161.6 million from last year's $140.2 million.
For the quarter under review, product revenues rose to $150.31 million from $140.32 million a year ago, while service and other revenues dipped to $8.05 million from $9.94 million in the prior year period.
Gross margin in the latest quarter was 67.6%, compared to 62.0% a year ago. Excluding the effect of non-cash charges associated with stock compensation and the amortization of intangibles, non-GAAP gross margin was 69.5% for the quarter, compared to 64.6% in the prior year period.
Research and development expenses increased to $34.4 million from $27.6 million in the prior year period.
The company generated $23.1 million in cash flow from operations during the quarter, compared to $27.3 million in the prior year period.
Year-to-date, Illumina's net income surged to $60.58 million or $0.44 per share from $13.32 million or $0.10 per share in the corresponding period. Adjusted net income was $107.11 million or $0.82 per share, compared to $78.57 million or $0.63 per share in the previous year. For the nine-month period, the company generated revenues of $485.76 million, up from $412.3 million a year ago.
For the fourth quarter of 2009, the company expects non-GAAP earnings of $0.24 to $0.25 per share and minimum revenues of $165 million. The Street expects earnings of $0.27 per share, on revenue of $200.16 million for the quarter.
Lowering its outlook for the full-year 2009, the company said it now expects non-GAAP earnings of $1.05 - $1.06 per share, and revenues of $651 million. Analysts project earnings of $0.89 per share, on revenue of $694.82 million, for the year.
Earlier, the company had estimated non-GAAP earnings of $1.13 to $1.23 per share and revenues of $690 million - $720 million.
Among the peers, biotechnology tools company Life Technologies Corp. (LIFE) reported a surge in profit for the third quarter, above analysts' estimates, reflecting strong growth in Europe, Asia Pacific, Japan and the majority of product areas. The company also raised its full-year adjusted earnings per share guidance.
Life Technologies' third-quarter net income totaled $41.14 million or $0.22 per share, higher than $18.78 million or $0.19 per share in the same quarter last year. Excluding items, net income increased significantly to $134.64 million or $0.73 per share from $61.46 million or $0.63 per share last year. The Carlsbad, California-based company's quarterly revenues surged to $800.73 million from $361.70 million in the prior-year quarter.
ILMN closed Tuesday's trading at $41.66, up $0.64 or 1.56%, on a volume of about 5.29 million shares. In the after hours, the stock lost $6.08 or 14.59% and traded at $35.50.
For the past 52-week period, the stock traded in the range of $18.82 - $44.07, on a 3-month average volume of about 1.46 million shares.
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