Illumina stocks creep 17% lower on Q2 bleak results

On Friday’s pre-market session, shares of Illumina Inc. tanked after issuing downbeat earnings results and a bleak outlook.

The American gene-sequencing company plummeted 16.91% or 38.45 points to $188.99 per share. The slump reflected a $6.05 billion loss to the firm’s stock valuation. On Thursday, the business closed 0.06% higher to $227.44 apiece.

In the second quarter, Illumina reported earnings of $0.57 per share, coming in worse than the $0.64 consensus. Eventually, revenue increased 3.00% year-over-year to $1.16 billion, but still down from the expected $1.22 billion.

CEO Francis deSouza explained that the present challenges in the macroeconomic environment offset the growth of their platforms. In line with this, he anticipated slowdowns in customers’ lab expansion, with a gloomy demand for the company’s instruments.

Moreover, Illumina cited that it recognized $609.00 million in legal contingencies. This includes an accrual of $453.00 million recorded in the quarter for the potential fine from the European Commission. The payment may impose up to 10.00% of its consolidated annual revenues.

Additionally, there is an estimated accrual of $156.00 million related to the settlement of its litigation with BGI Group. Last month, a US court case involving DNA sequencing asked the company to settle about $325.00 million to resolve the issue.

Illumina delivers bleak Q3 guidance

Illumina now forecasts full-year consolidated revenue growth in the range of 4.00-5.00%. Thus, it now expects an underlying EPS of $2.75 to $2.90 per share. This outlook is lower than the analysts’ projection of $4.12.

Subsequently, following the acquisition of blood test maker GRAIL last August, the business has two reportable segments.

Thus, it predicts 2022 Core Illumina revenue growth to be in the range of 3.50-4.50%. On the other hand, sales of the startup unit could post at $50.00-$70.00 million.

Illumina’s stocks have edged down by 40.28% or 153.43 points since the start of the year. Meanwhile, the S&P 500 index has fallen almost 12.29% or 589.29 points during the same period.

Shares of the biotechnology company dropped sharply in June after announcing the exit of its chief financial officer for Quest Diagnostics.