Illumina Q2 Earnings Surpass Expectations, Shares Down 20.2% YTD

Illumina (ILMN) Q2 earnings of $1.19 per share beat estimates, a 16.67% surprise. Revenue was $1.06 billion, surpassing the consensus estimate by 1.11%. The company has topped revenue estimates four times over the last four quarters. Shares have lost 20.2% YTD. The earnings outlook is mixed, with a Zacks Rank #3 (Hold) for the stock, indicating in-line performance with the market in the near future.

Illumina (ILMN), a leader in genetic testing tools, reported strong quarterly earnings for the second quarter of fiscal year 2025. The company's earnings per share (EPS) of $1.19 exceeded the Zacks Consensus Estimate of $1.02, marking a 16.67% surprise. This performance compares favorably with earnings of $0.36 per share a year ago. The company also posted revenues of $1.06 billion, surpassing the consensus estimate by 1.11%. This quarterly report represents an earnings surprise of +16.67%, a notable improvement over the previous quarter's surprise of +1.04% [1].

Over the past four quarters, Illumina has consistently surpassed consensus EPS estimates three times and revenue estimates four times. The company's strong financial performance is evident in its GAAP operating margin of 20.2% and non-GAAP operating margin of 23.8% for the second quarter. The company's cash flow provided by operations was $234 million, and free cash flow stood at $204 million for the quarter [2].

Illumina's stock has lost approximately 20.2% since the beginning of the year, compared to the S&P 500's gain of 8.2%. Despite this underperformance, the company's earnings outlook remains mixed. The Zacks Rank for Illumina is currently #3 (Hold), indicating that the stock is expected to perform in line with the market in the near future. Investors should closely monitor the company's earnings outlook and estimate revisions to gauge future stock movements [1].

The company's outlook for the coming quarters and the current fiscal year is also promising. The current consensus EPS estimate is $1.09 on $1.06 billion in revenues for the coming quarter and $4.25 on $4.23 billion in revenues for the current fiscal year. Additionally, Illumina's acquisition of SomaLogic from Standard BioTools, expected to close in the first half of 2026, subject to regulatory approval, could further bolster the company's market position [2].

Investors should be mindful of the broader industry trends. The Medical - Biomedical and Genetics industry is currently ranked in the bottom 41% of the 250 plus Zacks industries. However, the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1 [1].

References:
[1] https://www.nasdaq.com/articles/illumina-ilmn-q2-earnings-and-revenues-surpass-estimates
[2] https://www.illumina.com/company/news-center/press-releases/press-release-details.html?newsid=bbc5765a-ff9d-4bd1-af1e-85339cc61062