Illumina (NASDAQ: ILMN) seems to have gotten its groove back after a dismal performance in 2016. Shares were up nearly 25% year to date before the genomic sequencing company announced its fourth-quarter and full-year 2016 results after the market closed on Tuesday. Were those results enough to keep Illumina’s momentum going? Here are the highlights.

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Image source: Illumina.

Illumina results: The raw numbers

Metric Q4 2016 Q4 2015 Year-Over-Year Change Sales $619.3 million $591.5 million 4.7% Net income from continuing operations $123.9 million $104.5 million 18.6% Adjusted EPS $0.85 $0.81 4.9% More From Fool.com

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Data source: Illumina.

What happened with Illumina this quarter?

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Illumina had projected three months ago that revenue for the fourth quarter would come in close to the $600 million reported in the third quarter of 2016. The actual result announced on Tuesday was Celtabet a little better than expected.

The company attributed this increase in revenue primarily to sequencing consumables and microarrays. Consumables made up nearly two-thirds of Illumina’s total revenue in the fourth quarter. Sales of consumables jumped 20% in the fourth quarter compared to the prior-year period. Microarray revenue accounted for 16% of total revenue, with sales increasing 14% year over year.

This improvement was sorely needed. Illumina’s instrument sales declined 21% from the fourth quarter of 2015. It appears that some of the headwinds experienced in the third quarter carried over into the final quarter of the year.

Illumina was busy during the fourth quarter. Key developments over the past three months included:

  • The commercial launch of the NovaSeq system, a new high-throughput sequencing system that the company hopes can dramatically lower genomic sequencing costs.
  • The launch of the Bio-Rad single-cell sequencing solution.
  • The launch of the TruSight Tumor 170, a 170-gene next-generation sequencing solution designed to provide a better picture of a tumor’s genomic landscape.
  • The announcement of a deal with Philips (NYSE: PHG) to integrate Illumina’s sequencing systems with Philips’ IntelliSpace Genomics clinical informatics platform.
  • A partnership withIBM (NYSE: IBM) to integrate IBM’s artificial intelligence system Watson for Genomics into Illumina’s BaseSpace sequence hub and tumor sequencing process.

What management had to say

Illumina’s CEO, Frank de Souza, was more cheerful than he was in the third quarter. "We ended 2016 on a stronger note than we anticipated, with robust performance across sequencing consumables and microarrays," he said, adding, "We also made significant progress on key R&D programs as evidenced by the launch of NovaSeq, a brand new architecture that delivers the most powerful, flexible sequencer ever created, once again redefining the trajectory of sequencing."

Looking forward

Illumina expects first-quarter 2017 revenue of $580 million to $595 million, with adjusted earnings per share between $0.60 and $0.65. The company thinks that the NovaSeq launch will help drive earnings growth in the first quarter.

For full-year 2017, Illumina projects revenue growth of 10% to 12%. Adjusted earnings per share for 2017 are expected come in between $3.60 and $3.70. That reflects a year-over-year increase of 9.7% at the midpoint of the range.

Perhaps the most intriguing opportunities for Illumina in the days ahead are its GRAIL and Helix initiatives. Illumina formed GRAIL as a separate company in early 2016 to focus on enabling early cancer screening from a single blood test.In 2015, the company created Helix, which is working to create an app store for consumer genetic tests. While Illumina continues to dominate the genomic sequencing market, GRAIL and Helix just might generate the most excitement for investors in the future.

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Keith Speights has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Illumina. The Motley Fool has a disclosure policy.

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