Shares of Illumina Inc. saw a significant decrease of 6.6% in after-hours trading on Wednesday. This decline comes as the DNA-sequencing company adjusted its full-year sales outlook due to various factors affecting the consumer market and the uncertain economic recovery in China.
Initially, Illumina projected a sales growth of 7% to 10% for the year. However, the company now expects a more modest growth rate of approximately 1%. Illumina attributes this adjustment to several factors, including customers adopting a cautious approach to purchasing, a slower recovery in China, and an unforeseen temporary decline in high throughput consumables as customers transition to the NovaSeq X, one of the company’s sequencers.
In response to these challenges, Illumina is actively increasing customer support for the NovaSeq X and implementing disciplined expense management measures.
Q2 Performance Highlights
For the second quarter, Illumina reported a net loss of $234 million, or $1.48 per share. Although this represents a loss, it is narrower than the $535 million loss, or $3.40 per share, reported during the same quarter last year.
Revenue for the quarter showed a slight increase to $1.18 billion compared to $1.16 billion in the prior-year quarter. When adjusted for costs related to sales, research and development, and general and administrative expenses, Illumina’s earnings per share stood at 32 cents.
This performance surpassed analyst expectations, as FactSet polled analysts anticipated adjusted earnings per share of 2 cents on revenue of $1.16 billion.
Overall, while Illumina’s sales outlook adjustment affected investor confidence, the company remains committed to managing these challenges effectively and providing the necessary support to its customers during this transition period.