Illumina Inc. (NASDAQ:ILMN)

Gross Profit Margin

The gross profit margin exhibited minor fluctuations over the five-year period, starting at 69.48% in 2016, dipping to 66.35% in 2017, then recovering to peak at 69.63% in 2019 before slightly decreasing to 68.01% in 2020. This indicates relatively stable profitability at the gross level with small variations.

Operating Profit Margin

The operating profit margin showed variability, beginning at 24.48% in 2016 and declining to 22.02% in 2017. It then improved gradually to reach a high of 27.8% in 2019, followed by a sharp decline to 17.91% in 2020. This trend points to inconsistent operational efficiency, with a significant decrease in 2020 suggesting potential challenges in managing operating expenses or revenue generation.

Net Profit Margin

The net profit margin experienced fluctuations, starting at 19.29% in 2016, increasing substantially to 26.38% in 2017, and maintaining elevated levels around 24.78% to 28.28% between 2018 and 2019. However, it declined notably to 20.25% in 2020. This pattern suggests that while the company managed to sustain strong profitability through net operations for most years, the year 2020 presented headwinds affecting net profitability.

Return on Equity (ROE)

ROE followed a downward trend after peaking at 26.41% in 2017, decreasing steadily to 21.98% in 2018 and 21.72% in 2019, before falling significantly to 13.98% in 2020. This decline indicates a reduced ability to generate profits from shareholders' equity, particularly in the most recent year.

Return on Assets (ROA)

ROA displayed a similar pattern to ROE, increasing from 10.81% in 2016 to a high of 13.81% in 2017, then decreasing to 11.87% in 2018 and 13.7% in 2019. It ultimately dropped sharply to 8.65% in 2020. This suggests a decline in the effectiveness of asset utilization to generate earnings during 2020.

Revenue

The revenue showed a consistent upward trend from 2016 to 2019, increasing from 2,398 million US dollars in 2016 to 3,543 million US dollars in 2019. However, in 2020, there was a decline to 3,239 million US dollars, indicating a reduction compared to the previous year.

Gross Profit

Gross profit increased steadily from 1,666 million US dollars in 2016 to 2,467 million US dollars in 2019, mirroring the revenue growth. In 2020, gross profit decreased to 2,203 million US dollars, reflecting a contraction in profitability compared to 2019.

Gross Profit Margin

The gross profit margin fluctuated marginally over the period. It declined from 69.48% in 2016 to 66.35% in 2017, then recovered to stabilize around 69% in 2018 and 2019. In 2020, the margin slightly decreased to 68.01%, showing a minor reduction in profitability efficiency relative to revenue.

Revenue Trend

Revenue demonstrated a consistent upward trajectory from 2016 through 2019, increasing from $2,398 million in 2016 to a peak of $3,543 million in 2019. However, in 2020, revenue declined to $3,239 million, indicating a downturn following several years of growth.

Income from Operations

Income from operations increased modestly from $587 million in 2016 to $985 million in 2019, reflecting the revenue growth during the same period. In 2020, there was a sharp decline to $580 million, nearly returning to the 2016 level, which suggests operational challenges or increased costs impacting profitability.

Operating Profit Margin

The operating profit margin showed variability over the analyzed years. Starting at 24.48% in 2016, it slightly declined in 2017 to 22.02%, then improved to 26.49% in 2018 and 27.8% in 2019, indicating enhanced operational efficiency or a favorable cost structure during these years. The margin decreased significantly to 17.91% in 2020, consistent with the decrease in income from operations and revenue, further highlighting reduced operational profitability.

Overall Patterns and Insights

The data illustrates a phase of growth and improving operational efficiency from 2016 to 2019, followed by a notable contraction in 2020. The concurrent declines in revenue, income from operations, and operating margin in 2020 point to external or internal factors negatively affecting financial performance during that period. The sharp reduction in operating profit margin implies that profit pressures were not solely due to lower sales but also potentially higher costs or reduced operational leverage.

Revenue Trends

Revenue showed a consistent upward trend from 2016 to 2019, increasing from $2,398 million in 2016 to $3,543 million in 2019. However, this positive trajectory was interrupted in 2020, where revenue declined to $3,239 million, indicating a contraction compared to the previous year.

Net Income Performance

Net income attributable to Illumina stockholders increased steadily between 2016 and 2019, moving from $463 million to a peak of $1,002 million. In 2020, net income dropped significantly to $656 million, marking a notable decline from the prior year.

Net Profit Margin Analysis

The net profit margin exhibited fluctuation throughout the reported period. Starting at 19.29% in 2016, it improved considerably to 28.28% by 2019, suggesting enhanced profitability relative to revenue growth. However, in 2020, profit margin fell sharply to 20.25%, aligning with the declines observed in revenue and net income.

Overall Financial Insights

The data highlights a period of strong financial growth and improving profitability from 2016 through 2019, with both revenues and net income reaching record highs in 2019. The year 2020 marks a reversal in this trend, with reductions in revenue, net income, and profit margin, which could be indicative of external challenges impacting the company's financial performance during that year.

Net income attributable to Illumina stockholders

The net income demonstrates a generally positive growth trend from 2016 to 2019, increasing from $463 million in 2016 to a peak of $1,002 million in 2019. However, in 2020, there is a notable decline to $656 million, indicating a possible setback after several years of growth.

Total Illumina stockholders’ equity

The stockholders’ equity consistently increased each year over the period, starting at $2,197 million in 2016 and reaching $4,694 million by the end of 2020. This steady growth suggests continuous strengthening of the company’s capital base.

Return on Equity (ROE)

The ROE peaked in 2017 at 26.41%, followed by a gradual decrease through 2018 and 2019, settling around 21.7%. In 2020, there is a significant decline to 13.98%, which aligns with the notable decrease in net income despite the continued growth in stockholders’ equity. This decline suggests reduced profitability relative to the equity base in 2020.

Overall analysis

The data reveals that while the company experienced strong growth in net income and equity through 2019, 2020 marked a period of diminished profitability as reflected by the reduction in net income and ROE. The consistent rise in equity during this period may indicate retained earnings or additional capital infusion, but the return generated on this equity declined significantly in the latest year under review.

The financial data reveals several key trends over the five-year period ending in 2020. Net income attributable to stockholders showed a steady increase from 2016 to 2019, rising from $463 million to a peak of $1,002 million. However, in 2020, net income declined to $656 million, indicating a significant downturn compared to the previous year.

Total assets experienced consistent growth each year, increasing from $4,281 million in 2016 to $7,585 million by the end of 2020. The asset base expanded steadily, suggesting ongoing investments or asset acquisitions during this timeframe.

Return on assets (ROA) exhibited some fluctuations but generally remained strong through the period. ROA improved from 10.81% in 2016 to 13.81% in 2017, followed by a dip to 11.87% in 2018, and then a recovery to 13.7% in 2019. In 2020, ROA declined sharply to 8.65%, reflecting the reduced profitability relative to the asset base during that year.

Overall, the trends indicate a phase of expansion and improved profitability from 2016 to 2019, as evidenced by increasing net income, asset growth, and generally robust ROA figures. The year 2020 stands out as an anomaly with a noticeable decrease in net income and return on assets, despite continued asset growth. This may signify operational challenges or external factors impacting profitability in that year.