Illumina Drops Most Since 2011 as First-Quarter Sales Fall Shortby
Lower-than-expected sales, based on preliminary results
Shares down as much as 23 percent, biggest drop in 4 1/2 years
Illumina Inc. tumbled the most since October 2011 after the gene-sequencing company said first-quarter revenue was lower than estimated and two analysts cut their ratings on the stock.
Sales rose 6 percent to about $572 million last quarter based on preliminary results, Illumina said in a statement Monday after the markets closed. Analysts had predicted $596.8 million, the average of 18 analysts’ estimates compiled by Bloomberg.
Shares fell 23 percent to $137.33 at 9:50 a.m. in New York. Through Monday, the stock had already fallen 7.2 percent this year, while the Standard & Poor’s 500 Index gained 2.5 percent.
Bank of America Merrill Lynch reduced its rating to neutral from buy on the stock, and Cantor Fitzgerald cut its recommendation to hold. Cowen & Co., which rates Illumina outperform, reduced its price target to $180 from $215.
Illumina makes gene-sequencing machines used by hospitals, researchers and pharmaceutical companies. The devices are often used when developing new treatments, such as by analyzing tumors to figure out which drugs are most effective against different mutations. They’re also used by many diagnostic companies that offer genetic screening tests.
“Our first quarter results fell short of expectations largely due to lower than expected sales of HiSeq 2500, 3000 and 4000 instruments,” Chief Executive Officer Jay Flatley said in the statement.