Investors pretty much knew what was coming with Illumina's (NASDAQ:ILMN) second-quarter results. The genomic sequencing company gave a sneak peek of those results more than two weeks ago, causing Illumina's share price to plunge.

Illumina officially announced its full second-quarter results after the market closed on Monday. While its numbers were a little better than projected earlier this month, they were still disappointing. Here are the highlights from Illumina's second-quarter update. 

Image of DNA over a person' s finger

Image source: Getty Images.

Illumina results: The raw numbers


Q2 2019 

Q2 2018 

Year-Over-Year Change


$838 million $830 million


Net income from continuing operations

$296 million $209 million


Adjusted earnings per share (EPS)

$1.35 $1.43


Data source: Illumina.

What happened with Illumina this quarter?

Illumina reported revenue in the second quarter that was a little higher than the $835 million figure provided in its preliminary results announcement on July 12. But year-over-year growth of only 1% is far below what the company typically delivers.

There were three primary reasons behind Illumina's poor top-line showing. The company expected around $30 million more in revenue from population genomics initiatives. Its direct-to-consumer (DTC) revenue was lower than expected. Illumina also posted lower revenue from its non-high-throughput sequencing systems and consumables than initially forecast.

However, two of these three factors weren't totally surprising. Illumina announced weakening DTC revenue in its first-quarter results in April. The company has also warned repeatedly in the past that consumables revenue could be "lumpy" in some quarters.

Also, the lower-than-anticipated population genomics revenue appears to be a temporary issue. Illumina stated earlier this month that a major purchase on this front didn't close in late June as it originally expected. However, Illumina thinks the deal will close later this year. 

That big jump in net income on a generally accepted accounting principles (GAAP) basis comes with an asterisk. Illumina recorded $103 million on mark-to-market adjustments from its strategic investments, including a $92 million unrealized gain from a strategic investment that completed an initial public offering. The company's adjusted earnings per share exclude this impact.

What management had to say

Illumina CEO Francis deSouza stated:

While our second-quarter results clearly fell short of our expectations, we remain committed to leading innovation in genomics, and to enabling our global community of 6,300 customers who unlock more of the human genome each day in an effort to improve human health and, in many cases, save lives. In addition to continued sequencing consumables growth, we are encouraged by the sequential and year-over-year growth in shipments across our high, mid, and low-throughput sequencing system portfolio, including a record number of NextSeq Dx systems, reflecting the growing clinical opportunity.

Looking forward

As announced earlier this month, Illumina expects full-year 2019 revenue growth of around 6%. The company projects full-year GAAP earnings per diluted share between $6.41 and $6.51, with non-GAAP earnings per diluted share of $6 to $6.10.

Illumina's pending acquisition of Pacific Biosciences of California has come under close scrutiny in the United Kingdom where regulators are investigating the transaction. However, the company still expects this acquisition will close in the fourth quarter of 2019. 

Despite the disappointing second-quarter results, Illumina's issues appear to be only temporary ones. Demand for genomic sequencing should increase in the future with the expansion of personalized medicine and population genomics as well as new ways to detect cancer at early stages using DNA testing. Illumina's long-term prospects appear to be as bright as ever.  

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