Illumina (NASDAQ:ILMN) was up as much as 10% today after it released earnings yesterday afternoon, which is a little shocking considering the supplier of genomic-analysis equipment had pre-announced revenue that would be lower than guidance earlier this month.

The reason for the increase could be a little bit of a bounce after an overreaction to the lowered guidance for the year, but the bigger contributor was probably the staggering margins that Illumina put up. Gross margins were up more than 500 basis points compared to the year-ago quarter, and up more than 200 basis points compared to the first quarter.

Like other companies with a "razor and blade" model -- Intuitive Surgical (NASDAQ:ISRG), Hewlett-Packard (NYSE:HPQ), Green Mountain Coffee Roasters (NASDAQ:GMCR), and of course Gillette, now part of Procter & Gamble (NYSE:PG) -- the installed base of genome sequencers is driving the sales of higher-margin sequencing consumables.

While revenue was up 15% year over year, the increased margin expansion allowed earnings per share to double from $0.09 per share last year to $0.18 per share this year.

Illumina won't be able to leverage margin expansion forever though, so it'll have to get back to growing the old-fashioned way: by increasing sales.

To reaccelerate the growth, Illumina needs two things. Government stimulus money needs to wind its way through the granting agencies and eventually to laboratories that can spend it on equipment and reagents, and Illumina needs to incorporate data from the 1,000 genome project onto its genomic array chips. The stimulus money will likely show up in the second half of the year, but the array business won't reaccelerate until the second half of next year.

Investors are going to have to wait, but I think Illumina has a little more monster growth left in it.

Illumina is a Motley Fool Stock Advisor pick. Let Fool co-founders David and Tom Gardner show you their top stock picks absolutely free with a 30-day trial. 

Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. Intuitive Surgical and Green Mountain Coffee Roasters are Rule Breakers selections. Procter & Gamble is an Income Investor pick. The Fool owns shares of Procter & Gamble and has a disclosure policy.