Illumina shares slip after genetic testing group lowers profit guidance

Investing.com -- Shares in Illumina (NASDAQ:ILMN) shed more than a tenth of their value in early U.S. trading on Friday after the genetic testing company lowered its annual income guidance for a second consecutive quarter.

In a trading update, the California-based life sciences firm said it now expects to report adjusted earnings per share of $0.60 to $0.70 in its 2023 fiscal year, down from its prior outlook of $0.75 to $0.90.

Illumina also warned of a "challenging" operating environment, although Chief Executive Officer Jacob Thaysen said he remained confident that the company will be able to navigate these issues and position itself for long-term success.

Third-quarter sales edged up by 0.4% compared to the same period last year to $1.12 billion, narrowly missing Bloomberg consensus estimates of $1.13 billion.

Sales of its core products, which include instruments used in gene sequencing, dropped by 2.3% year-on-year to $941.0 million, below expectations of $953.4M. Illumina had previously flagged that demand would be hit by a sluggish post-pandemic recovery in China and weak consumer spending.

During the quarter, the group also logged $712M and $109M in impairments related to its Grail unit.

Last month, New York-listed Illumina was ordered by European antitrust regulators to sell Grail after the company completed its $7.1B purchase of the cancer test maker in 2021 without approval from Brussels. The EU had earlier fined Illumina €432M (€1 = $1.0673) in July for defying its rules.

The group has also faced blowback from its shareholders over the deal. Activist investor Carl Icahn sued the board of directors at Illumina in October, reportedly accusing them of violating their fiduciary duty.