Illumina (Nasdaq: ILMN) put in another impressive quarter, something we've come to expect from the Stock Advisor pick.
We've also come to expect major announcements at earnings time about new programs and acquisitions. We got both yesterday: the acquisition of Helixis and the formation of the Illumina Genome Network.
But first let's plow through the numbers:
- Revenue increased 31% year over year.
- Operating income up 31% as well.
- The bottom of the 2010 earnings guidance was raised $0.03.
Impressive indeed. Net earnings were hurt by a higher tax rate, but there isn't a whole lot the company can do about that. Operationally, Illumina is firing on all cylinders, and the acquisition and new program should help keep that growth moving forward.
The acquisition of Helixis gives Illumina a line of real-time PCR machines that can measure the amount of a specific DNA sequence in a sample. The machines will launch next month into a market that's been dominated by more expensive machines from companies such as Life Technologies (Nasdaq: LIFE) and Bio-Rad Laboratories (NYSE: BIO).
As ominous as the Illumina Genome Network sounds, it's nothing more than Illumina hooking up researchers that need sequencing with companies or institutes with Illumina's sequencers that aren't running at full capacity. Everyone wins, especially Illumina because the DNA sequencers consume reagents with each run.
Helping facilitate your customers' sales isn't that novel of a business model. Intuitive Surgical (Nasdaq: ISRG) provides marketing support for hospitals to advertise their robotic surgery capabilities. And the displays in grocery stores are often provided by companies such as Coca-Cola (NYSE: KO), PepsiCo (NYSE: PEP), and Procter & Gamble (NYSE: PG), whose products they're hocking.
But sometimes boring is beautiful, and the Genome Network should help further drive reagent sales, which already make up nearly 60% of the company's revenue.
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