Illumina (ILMN) Stock: Falling Hard on Q3 & Q4 Guidance

Illumina, Inc. (NASDAQ: ILMN)

Illumina is having an incredibly rough day in the market today, and for good reason. The company released a business update in after-hours yesterday that showed that revenue isn’t going to be quite as strong as it was expected to be. Today, we’ll talk about the release, how the stock reacted to the news, and what we can expect to see from ILMN moving forward. So, let’s get right to it…

ILMN Releases Updated Guidance For Q3

As mentioned above, Illumina is having an incredibly bad day in the market today after updating investors with regard to revenue expectations. Unfortunately, these expectations aren’t quite what they were before. In a statement, the company said that management has completed a preliminary financial analysis. While the analysis is unaudited, it is expected that revenue will come in far lower than previously guided.

In the released, ILMN said that it is expecting to report about $607 million in overall revenue for the third quarter. While the figure would represent a strong, 10% year over year increase from $550 million in the same quarter last year, it misses the company’s own guidance. During the quarter, previous expectations were that the company would generate between $625 and $630 million in revenue. Not to mention, The Street is projecting that the company will report $628.1 million. So, no matter which expectations you go by, the company is likely to miss the mark.

Guidance For Q4 Was No Better

Unfortunately, the company isn’t expecting for its blues to end in the fourth quarter either. In fact, in the same release, ILMN said that it is expecting to see either flat or minimal growth from Q3 revenue levels in Q4. That’s another big hit as it widely misses expectations. In fact, The Street was expecting that the company would generate revenue in the amount of $684.4 million in the fourth quarter.

What We’re Seeing From The Stock

One of the first things that we learn as investors is that the news moves the market. Any time positive news is released with regard to a publicly traded company, we can expect to see gains in the value of the stock as a result. Adversely, negative news will generally lead to declines. In this particular case, the news released with regard to Illumina was overwhelmingly negative. After all, investors ultimately invest for growth, and with weak revenue guidance for Q3 and Q4, that’s something the company is missing. As a result, the stock took a dive. Currently (12:33), ILMN is trading at $139.07 per share after a loss of $45.78 per share or 24.77% thus far today.

What We Can Expect To See Moving Forward

Moving forward, I have a relatively bearish opinion of what we can expect to see from Illumina. At the end of the day, the company has announced that they are not expecting to report much by way of strong revenue for the third quarter. To make matters worse, the company isn’t expecting to see growth in the fourth quarter. Considering the fact that investors ultimately invest for growth, this is incredibly troubling. At the end of the day, I believe that ILMN will see declines ahead.

What Do You Think?

Where do you think ILMN is headed? Join the discussion in the comments below!