Illumina reported after the close of the market recently that its third quarter 2019 revenues grew 6 percent year over year.

For the three months ended Sept. 29, 2019, Illumina recorded total revenues of $907 million compared to $853 million a year ago, driven by a 12 percent growth in sequencing sales that was offset by a 24 percent decline in microarray revenues.

The company's Q3 revenues beat the consensus Wall Street estimate of $870.8 million.

Illumina reported $746 million in product revenue, up 5 percent from $710 million in Q3 2018, and $161 million in service and other revenue, up 13 percent from $143 million a year ago.

"This was a solid quarter for Illumina, with product revenue in line with expectations, and a stronger than expected revenue contribution associated with partner collaborations to develop distributable clinical in vitro diagnostics for Illumina sequencers," Illumina President and CEO Francis deSouza said in a statement. "Third quarter NovaSeq system shipments represented the second highest since launch and included capacity expansion to support the UK Biobank initiative to sequence 450,000 whole genomes over the next several years."

On a conference call following the release of results, Illumina CFO Sam Samad said that sequencing consumables revenues grew 11 percent over Q3 2018 to $525 million, with library prep revenues growing 13 percent year over year. Array consumables revenues were down 10 percent, reflecting lower demand from the direct-to-consumer market. Services and other revenues were $138 million, up 27 percent year over year, driven by higher in vitro diagnostic licensing and development revenue — more than $30 million, which included revenue from the firm's licensing agreement with Qiagen announced earlier this month, offsetting a decline of revenue due to lower volume from the Genomics England 100,000 Genomes Project.

Sequencing instrument revenues were "up slightly" year over year to $142 million, Samad said, due to higher NovaSeq shipments, while array system revenues were $4 million, down significantly from Q3 2018. Samad noted that a year ago Illumina saw record array shipments associated with DTC testing. Combined instrument revenues accounted for 16 percent of all revenues.

"During the quarter, NovaSeq surpassed HiSeq X to become the [Illumina] system generating the most sequencing data," deSouza said on the call. With only about a third of HiSeq customers converted to the NovaSeq system, he said there was "still plenty of opportunity for NovaSeq." He added that the firm is "seeing strong uptake in the NextSeq Dx" clinical sequencing system, which has accounted for about 20 percent of all NextSeq system shipments so far this year, twice what it was in 2018.

Illumina's Q3 net income was $234 million, or $1.59 per share, compared to $199 million, or $1.35 per share, in the year-ago period. On an adjusted basis, EPS was $1.93, beating analysts' consensus estimate for EPS of $1.40.

"Non-GAAP net income excludes an unrealized net loss of $43 million from mark-to-market adjustments on our strategic investments, primarily from our marketable equity securities," Illumina said in a statement.

Illumina's R&D expenses fell 5 percent to $151 million from $159 million, while its SG&A expenses shrank 4 percent to $189 million from $197 million.

The company finished the quarter with $1.82 billion in cash and cash equivalents and $1.35 billion in short-term investments.

The firm noted that during the quarter, it repurchased $199 million of outstanding common stock in under the previously announced share repurchase program, which has a remaining balance of approximately $289 million as of Sept. 29.

Illumina said it still expects year-over-year revenue growth of approximately 6 percent for FY 2019. The company also said today that it expects full-year adjusted EPS of $6.40 to $6.45. On average, analysts are expecting FY 2019 EPS of $6.04.

Except for acquisition-related expenses incurred during the first three quarters of 2019, which are reflected in its guidance, the guidance excludes any impact from the pending acquisition of Pacific Biosciences. Earlier on Thursday, the UK Competition and Markets Authority released provisional findings that the planned deal could result in a "substantial lessening of competition" in the market for next-generation sequencing systems and said blocking the deal would be "the only structural remedy that CMA has identified as being likely to be effective" in remedying that situation.

Illumina's shares were down 10 percent to $283.76 in morning trading on the Nasdaq.