What happened?
Genomic sequencing specialist Illumina (ILMN -4.38%) is going to replace its CEO. The company announced that current president Francis deSouza will take the position, effective July 5. He replaces longtime CEO Jay Flatley, who has headed the company since 1999. Upon stepping down, Flatley will become executive chairman of the board of directors.
Image source: Illumina.
Francis deSouza has been with Illumina since 2013, joining the California-based company as its president. His appointment was approved unanimously by the board.
In the press release heralding the transition, Illumina quoted Flatley as saying that deSouza "is an exceptional leader, with a demonstrated track record of leading large organizations and implementing complex growth strategies."
Does it matter?
A change at the top always matters. Illumina's transition seems to be a textbook case of how to do it smoothly. deSouza is an accomplished, and clearly trusted, insider who has been at the forefront of the company's initiatives. What's also encouraging is that Illumina's guiding light, Flatley, will still be very much a presence as chairman; it's good to know his counsel will theoretically be immediately at hand.
deSouza's got his work cut out for him. Illumina's share price is down by around 16% so far this year, notably underperforming the S&P 500 index. That was due in no small part to uninspiring Q4 results, which saw per-share earnings drop by 7% on a year-over-year basis, despite a nice 15% rise in the top line.
The company's guidance for fiscal 2016, meanwhile, only met the market's expectations. Illumina anticipates a 16% year-over-year revenue improvement to around $2.57 billion, and adjusted EPS of $3.55 to $3.65. The average analyst estimate was for $2.57 billion and $3.64, respectively.
