Illumina Issues Downside third Quarter Guidance; Suspends Fiscal Year 2011 Guidance

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Last Update: 07-Oct-11 09:58 ET

Illumina (ILMN $26.91 -13.02) issues downside revenue guidance and suspends fiscal year 2011 guidance.

"We currently believe the following factors negatively affected our revenue in the third quarter compared to our forecast: Continued uncertainty surrounding the levels of research funding in the U.S. and Europe resulted in purchasing delays for both instruments and consumables, particularly among large volume centers; The launch of the V3 sequencing kits in the second quarter created excess capacity that customers were unable to fully utilize. This resulted in a decrease in the consumable revenue per instrument due to fewer runs. This impact will diminish as customers scale and gain access to greater numbers of samples; A significant drop in reagent usage by our remaining Genome Analyzer installed base; and Lower than expected upgrades of Genome Analyzers to HiSeq 2000 systems. In the quarter, we saw what we believe to be an unprecedented slowdown in purchasing due to uncertainties in research funding and overall economic conditions, as well as a temporary excess of sequencing capacity in the market. We expect these conditions to continue through at least the fourth quarter, while the 2012-2013 U.S. budgets for NIH and other related agencies are determined. While we believe that revenue for the fourth quarter 2011 will be higher than third quarter levels, we are suspending the financial guidance for the full year 2011 as provided on July 26, 2011, due to the many market uncertainties described earlier, and as such, this guidance should no longer be considered as the company's current expectations."