Illumina, Inc. (ILMN) Plummets on Earnings Miss

Shares of San Diego, California, based Illumina, Inc. (ILMN) fell sharply on Tuesday, against the backdrop of a generally higher day in stocks overall. Illumina's stock was down 23.16%, losing $41.25 per share, to close at $136.88, on volume of 11,268,969 shares. The stock fell on the announcement Monday evening that the company cut its first-quarter revenue estimate due to lower sales of genome sequencers.

Founded in 1998, Illumina, Inc. develops, manufactures and markets integrated systems for the analysis of genetic variation and function.
The company provides sequencing and array-based solutions for genetic analysis in addition to selling products, it provides genotyping, NIPT and whole-genome sequencing services. It provides its products and services to leading genomic research centers, academic institutions, government laboratories, hospitals, and reference laboratories as well as pharmaceutical, biotechnology, agrigenomics, commercial molecular diagnostic, and consumer genomics companies. The company's stock trades on the NASDAQ Exchange.

After hours on Monday, Illumina disclosed that its first-quarter revenue estimate now stands at $572 million. The company had projected revenue of $591.5 as recently as February, when the company reported its fourth-quarter results. The decline in revenue is attributed to lower sales of its HiSeq genome sequencers. Though its sales are expected to meet expectations in North America and Asia, they are expected to underperform in Europe.

The estimated first-quarter revenue will represent an increase of 6% over the $539 million in revenues from the first quarter of 2015, as well as 7% growth on a constant currency basis. The revenue estimate is unaudited and is based on management's preliminary financial analysis. Analysts had expected first-quarter revenue to come in as high as $597 million. The reduction in the revenue estimate means that the company now anticipates that full-year revenue growth will be 12% for the year, compared to its February guidance pegging growth at 16%.

Yet today, Illumina's stock is down about 28%. Tuesday's trading volume of more than 11.2 million shares is many times higher than its average daily trading volume of just below 1.4 million shares. Tuesday's sell-off was the largest for Illumina in recent years, moving the stock near the bottom of its 52-week trading range.

“Our first quarter results fell short of expectations largely due to lower than expected sales of HiSeq 2500, 3000 and 4000 instruments," reported Illumina Chairman and CEO, James Flatley. "Despite this slow start in Q1, we anticipate that our Americas and Asia Pacific regions will meet our expectations for the full year, but that Europe will underperform. As a result, we now project approximately 12% revenue growth for fiscal 2016. Given the disappointing outlook in Europe, we have made management changes in the region and plan to implement a program of actions to achieve our goal of delivering the robust growth we believe the market can support.”

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Published on Apr 20, 2016
By Kevin Mercadante

Copyrighted 2020. Content published with author's permission.

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