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Illumina reports mixed results with strong Q4 and GRAIL divestiture plans

AInvestThursday, Feb 8, 2024 10:02 pm ET
1min read

$ILMN(ILMN)

Illumina, a pioneer in genetic sequencing technology, disclosed its financial outcomes for the final quarter and the entire 2023 fiscal year, revealing contrasting performances. The company witnessed a 4% revenue upswing in Q4, propelled by the demand for its NovaSeq X series, but encountered a 2% revenue dip over the fiscal year, holding steady on a constant currency basis. 

A significant drop in GAAP diluted earnings per share from Q4 2022's $(0.89) to Q4 2023's $(1.11), and a yearly fall from $(28.00) to $(7.34), was primarily due to substantial impairments linked to the GRAIL acquisition. Conversely, non-GAAP diluted earnings per share stabilized at $0.14 in Q4, despite a yearly decrease from $2.12 to $0.86.

A notable uptick in free cash flow for both the quarter and year indicates robust operational cash generation, earmarking potential for investments or enhanced shareholder returns.

With its strategic pivot, including the anticipated GRAIL divestiture to align with European Commission directives, Illumina aims for rejuvenated growth and value enhancement. The GRAIL divestiture, expected to conclude by Q2 2024, aligns with strategic compliance efforts. For 2024, Illumina forecasts Core Illumina revenue to mirror 2023 figures, targeting a non-GAAP operating margin around 20%.

Illumina's financial stance is solidified by a $1,054 million cash reserve at Q4's close. Despite gross margin and operating profit hurdles, the enhanced free cash flow highlights the company's operational efficiency.

Illumina's Q4 surge in revenue and free cash flow offers a glimmer of optimism, offset by the yearly revenue regression and diluted earnings per share decline. The forthcoming GRAIL divestiture and strategic focus on operational excellence and innovation stand as potential growth catalysts.


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