Out of the Gate: Forecasts Lift Illumina
Tuesday February 5, 10:19 am ET
Illumina Stock Rises on Outlook, Analysts Expect Strong Sales of Gene-Sequencing Products
NEW YORK (AP) -- Shares of genetic-analysis-instrument maker Illumina Inc. advanced Tuesday after the company forecast larger first-quarter and full-year profits than Wall Street expected, which analysts said was due to strong demand for its products.
Adjusting for one-time costs, the company expects to earn 33 cents to 36 cents per share in the first quarter, on $110 million to $115 million in sales. For the full year, it forecast a profit of $1.45 to $1.60 per share on $500 million to $525 million in revenue. Its 2008 revenue estimate was also greater than analysts expected.
The stock rose $4.50, or 6.9 percent, to $69.39 in morning trading.
Canaccord Adams analyst Matthew Scalo upgraded the stock to "Buy" from "Hold" on the news, and raised his price target to $85 per share from $60.
Scalo said instrument sales more than tripled during the quarter, and predicted the company will sell more than 300 of its Genome Analyzer system this year -- increasing the number of installed Analyzers to 530 from 197. He said sales will not be slowed by credit market troubles.
"We see 2008 as a breakout year for the Genome Analyzer as increasing throughput and novel applications enables a smaller volume center to accomplish what have been done traditionally at larger Genome centers," he said.
The Genome Analyzer is designed to sequence genetic information about 100 times the rate of older devices, for less than 1 percent of the cost.
Robert W. Baird & Co. analyst Quintin Lai, who kept an "Outperform" rating on the stock, said sales of Illumina's newest gene sequencing products were better than his expectations, as well as Illumina's forecasts. |
