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Understanding Illumina (ILMN) Reliance on International Revenue

In this article:

Did you analyze how Illumina (ILMN) fared in its international operations for the quarter ending June 2024? Given the widespread global presence of this genetic testing tools company, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.

In the current era of a tightly interconnected global economy, the proficiency of a company to penetrate international markets significantly influences its financial health and trajectory of growth. For investors, the key is to grasp how reliant a company is on overseas markets, as this provides insights into the durability of its earnings, its ability to exploit different economic cycles, and its overall growth capabilities.

International market involvement serves as insurance against economic downturns at home and enables engagement with economies that are growing more quickly. Still, this move toward diversification is not without its challenges, as it involves navigating through the fluctuations of currencies, geopolitical threats, and the distinctive nature of various markets.

Our review of ILMN's last quarterly performance uncovered some notable trends in the revenue contributions from its international markets, which are commonly analyzed and tracked by Wall Street experts.

For the quarter, the company's total revenue amounted to $1.11 billion, experiencing a decline of 5.4% year over year. Next, we'll explore the breakdown of ILMN's international revenue to understand the importance of its overseas business operations.

Trends in ILMN's Revenue from International Markets

Asia-Pacific, Middle East and Africa generated $108 million in revenues for the company in the last quarter, constituting 9.7% of the total. This represented a surprise of -10.94% compared to the $121.26 million projected by Wall Street analysts. Comparatively, in the previous quarter, Asia-Pacific, Middle East and Africa accounted for $116 million (10.8%), and in the year-ago quarter, it contributed $118 million (10%) to the total revenue.

Of the total revenue, $75 million came from Greater China during the last fiscal quarter, accounting for 6.7%. This represented a surprise of -6.47% as analysts had expected the region to contribute $80.19 million to the total revenue. In comparison, the region contributed $78 million, or 7.3%, and $115 million, or 9.8%, to total revenue in the previous and year-ago quarters, respectively.

International Market Revenue Projections

Wall Street analysts expect Illumina to report $1.08 billion in total revenue for the current fiscal quarter, indicating a decline of 3.5% from the year-ago quarter. Asia-Pacific, Middle East and Africa and Greater China are expected to contribute 11.6% ($124.69 million) and 7.6% ($82.45 million) to the total revenue, respectively.

For the full year, the company is expected to generate $4.32 billion in total revenue, down 4.1% from the previous year. Revenues from Asia-Pacific, Middle East and Africa and Greater China are expected to constitute 11.4% ($494.21 million) and 7.6% ($328.11 million) of the total, respectively.

Wrapping Up

Relying on global markets for revenues presents both prospects and challenges for Illumina. Therefore, scrutinizing its international revenue trends is key to effectively forecasting the company's future outlook.

In an era of growing international ties and escalating geopolitical disputes, financial analysts on Wall Street pay keen attention to these developments to fine-tune their earnings estimations for businesses operating across borders. It's important to note, however, that a range of additional variables, like a company's local market status, also play a crucial role in shaping these forecasts.

At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.

The Zacks Rank, our proprietary stock rating tool, comes with an externally validated impressive track record. It effectively utilizes shifts in earnings projections to act as a dependable barometer for forecasting short-term stock price trends.

Currently, Illumina holds a Zacks Rank #1 (Strong Buy), signifying its potential to outperform the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

A Review of Illumina's Recent Stock Market Performance

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