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Illumina Misses Q1 Expectations, Posts Preliminary Revenue Growth of 6 Percent

NEW YORK (GenomeWeb) – Illumina's estimated first quarter revenues grew 6 percent over the first quarter of 2016, falling short of expectations, the firm said Monday after the close of market and in advance of its first quarter earnings call.

Illumina estimated its Q1 revenues to be around $572 million compared to $539 million in the year ago quarter. Analysts, on average, had predicted that Illumina's Q1 revenues would be $596.3 million.

In response to the announcement, the firm's shares plummeted 25 percent to $133.49 in early Tuesday trade on the Nasdaq.

Illumina CEO Jay Flatley said in a statement that "first quarter results fell short of expectations largely due to lower than expected sales of HiSeq 2500, 3000, and 4000 instruments." As a result, the firm now projects 12 percent revenue growth for the full year, down from a previous projection of 16 percent.

During a conference call to discuss the preliminary revenues, Flatley said that sales of the company's HiSeq X and benchtop instruments, as well as its array and services businesses, all "performed to expectation."

In particular, the firm received orders for more than 20 HiSeq X units and also shipped 20 units. Going forward, Flatley projected that demand for HiSeq X would continue to be strong, particularly with large projects like the Chinese Precision Medicine Initiative kicking off, and he expects the company will continue to ship 20 to 30 HiSeq X units per quarter. Illumina also received orders for 75 of its newest instrument, the MiniSeq.

Flatley said that sales in Europe were particularly low in Q1 and he expects that the company will underperform in Europe this year, while meeting expectations in the Americas and in Asia Pacific.

"Given the disappointing outlook in Europe, we have made management changes in the region and plan to implement a program of actions to achieve our goal of delivering the robust growth we believe our market can support," Flatley said in the statement.

Also as part of its Europe plan, a senior sales manager in the US has been assigned to work there, Flatley said during the call.

He did not provide an estimate on the company's Q1 earnings but said that it would likely be below the Wall Street estimate of $.79 per share.

Sequencing consumables in the quarter grew 24 percent, to $300 million, with MiSeq, NextSeq, and HiSeq consumables all at or above expectations.

Shipments to clinical customers grew 20 percent, despite laboratories shifting to provide noninvasive prenatal tests in-house.