Illumina Shares Tank After Annual Guidance Fall Short Of Expectations

  • During JP Morgan Conference, Illumina Inc ILMN announced interim Q4 FY22 sales of $1.075 billion, lower than $1.10 billion in Q3 FY22. Grail sales reached $30 million.
  • It recorded NextSeq 1k/2k shipments and orders and 750 total sequencing instruments shipped.
  • Related: Illumina's Q3 Profits Hit By Impairment Of Almost $4B, Cuts Annual Guidance.
  • For FY22, consolidated sales reached around $4.576 billion, missing the consensus of $4.71 billion. Grail revenues reached $55 million.
  • For FY23, Illumina sees sales of $4.90–$5.03 billion, representing a growth of 7%-10%, below the initial 10% outlook provided when its third quarter results were released, with adjusted EPS of $1.25–$1.50, well below the consensus of $2.99.
  • The company expects Grail revenues of $90-$110 million, with an adjusted operating loss of $(670) million.
  • Illumina expects to ship between 40 and 50 NovaSeq X instruments in Q1 and more than 300 in 2023.
  • During the presentation, the company also highlighted the day's earlier announcement that the firm would partner with Amgen Inc AMGN to sequence 35,000 samples from the Nashville Biosciences biobank. The deal could lead to the largest genomic dataset of African Americans, who have been underrepresented in genomic research.
  • Stifel analyst says the interim Q4 results were solid given the potential for choppy trends ahead of the new Nova X cycle - though the guide for FY23 has softened a bit from the Oct view. The analyst keeps a Buy rating.
  • Additionally, those hoping for a meaningful advance in the conversation around a GRAIL divestiture were left unfulfilled.
  • SVB Leerink writes that investor appetite for further challenges at ILMN remains limited. Still, the core long-term thesis remains intact, with its gross margin improving as NovaSeq X+ product launch progresses and as GRAIL is potentially divested. 
  • It keeps the Outperform rating but lowers the price target to $249.
  • Price Action: ILMN shares are down 6.17% at $194.56 on the last check Tuesday.
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