Gene chipmaker Illumina (NASDAQ:ILMN) announced another stellar quarter yesterday evening, prodding its shares to jump more than 10% today.

Revenues more than doubled year-over-year for the quarter -- a stellar performance indeed. This has become quite the pattern for Illumina, marking an eighth straight quarter of double-digit growth in revenues.

The company reported second-quarter net income of $9.3 million. The income was dragged down by $7.8 million in stock options expense during the quarter. It's not surprising that the employees are exercising more options -- the stock price increased 39% during the second quarter. The increase in total shares has dragged down the earnings per share as well; earnings for the quarter were up 37% year-over-year, but earnings per share were up just 14%.

Adjusted gross margins slipped to 65.7% for the second quarter of 2007 compared to 67.9% in 2006, but that's not a real problem since it was a result of increased sales of instruments relative to consumables, which have gross margins above 70%. The sales of all those machines will eventually push gross margins back up as customers start buying reagents for their new machines.

Illumina spent considerably more on research and development this quarter, thanks to the inclusion of R&D expenses from Solexa, which it acquired in January. Fortunately, the increased sales caused the percentage of sales spent on R&D (excluding non-cash charges) to remain the same, at about 18.6%. Hopefully the increased spending will pay off in the future with new innovative products.

At the end of the second quarter, Illumina began shipping its new Human1M DNA Analysis BeadChips, that contains more than one million single nucleotide polymorphisms (SNPs), in addition to novel copy number variation content made available through a collaboration with deCODE genetics (NASDAQ:DCGN). Testing for one million SNPs on a single chip cuts researchers' costs and processing time, which should drive sales of the new product. The new chip also tops competitor Affymetrix's (NASDAQ:AFFX) SNP Array 5.0 chip, which only contains 920,000 SNPs.

Illumina raised its estimate of earnings for the year to $1-$1.10 per share from the $0.89-$1 that it announced last April. The April announcement was an increase over the estimate announced just two months prior. Clearly the company doesn't know its own strength, and investors may see an additional earnings estimate increase as the year progresses.

With a trailing-12-month P/E ratio close to 50, Illumina is certainly in the growth stock category. If it can continue to produce double-digit sales increases quarter after quarter, investors will be able to justify its inflated P/E for some time. But as Affymetrix saw last year, if the company slips up, investors don't have too much patience for lost market share.

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Fool contributor Brian Orelli, Ph.D., doesn't own shares of any company mentioned in this article. The Fool's disclosure policy is rock-solid.