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Citigroup Lowers Illumina Revenue Forecast

By a GenomeWeb staff reporter

NEW YORK (GenomeWeb News) – Citigroup today lowered revenue estimates for Illumina for the second quarter and for full-year 2011, saying that revenues from a trade-in program for the HiSeq 2000 next-generation sequencing platform would not be a "significant contributor" to total revenues.

Last year, Illumina launched a trade-in program offering customers the opportunity to trade in their Genome Analyzers for the new HiSeq 2000 system.

In a research note, analyst Amit Bhalla attributed the change in the estimate to anticipated lower revenues from Illumina's sequencing business, which he forecast at $97 million for the second quarter, down from the $105 million previously forecast.

He maintained a "Buy" rating on Illumina and a $90 target on the company's share price. His EPS estimate for the second quarter was also unchanged at $.38.

"We believe this will be a positive 2Q for Illumina as reduced trade-in volume should begin to materialize into gross margin expansion and investor attention focuses on the MiSeq launch in 2H11," Bhalla said.

For full-year 2011, he trimmed revenue estimates to $1.185 billion from $1.193 billion, and lowered the EPS estimate to $1.59 from $1.60. The full-year 2012 revenue estimate was lowered to $1.451 billion from $1.461 billion. Bhalla kept the EPS estimate at $2 for 2012.

Illumina is scheduled to report its second-quarter financial results on July 26.

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