Shares of Illumina Inc. dropped as much as 7% in late trading after the company cut its sales and profit outlook and said a pair of top executives are departing.
(Bloomberg) — Shares of Illumina Inc. dropped as much as 7% in late trading after the company cut its sales and profit outlook and said a pair of top executives are departing.
The DNA-sequencing company now expects adjusted earnings of 75 cents to 90 cents a share, down from the previously forecast range of $1.25 to $1.50 a share. Analysts are expecting $1.38. Illumina cut its sales growth forecast to 1%, citing lower demand for its products.
“We expect our second half revenue to be negatively impacted by customers remaining more cautious in their purchasing, a more protracted recovery in China, and a larger-than-expected temporary decline in high throughput consumables as customers transition to the NovaSeq X,” Illumina’s interim chief executive officer Charles Dadswell said in a statement.
The company also said Chief Technology Officer Alex Aravanis and Chief Medical Officer Phil Febbo are leaving. Steven Barnard, currently Illumina’s global head of advanced science, will take over as chief technology officer. Illumina lost its chief executive officer in June when Francis deSouza resigned, and the company has yet to name deSouza’s successor.
This year has been tumultuous for the San Diego-based company. Carl Icahn waged a proxy fight against the company over Illumina’s troubled acquisition of early cancer detection company Grail. The company eliminated more employees in a bid to cut costs and was hit with a record $476 million fine by European regulators over its hasty acquisition of Grail.
Earlier this year, Illumina rolled out its new NovaSeq X machines, which promise to produce faster and more accurate sequencing results than previous models. The company has attributed softer sales in recent quarters to customers waiting to buy the newer products.
For the second quarter, Illumina reported adjusted earnings of 32 cents a share and sales of $1.18 billion. Analysts were anticipating 1 cent and $1.16 billion, respectively.
Illumina shares have lost nearly 9% this year as of Wednesday’s close.
(Updates with executive departures starting in first paragraph.)
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