Illumina reported its third-quarter numbers last week, showing anaemic sales growth. The gene-sequencing operator made things worse by lowering its guidance for the 2022 fiscal year, estimating sales to be flat or rise by a rather pedestrian 1% as compared to 2021. The stock price sank on the news.
Quarterly revenue was $1.12 billion, up 1% from a year ago. Earnings fell almost 77% due to a $3.91 billion goodwill impairment related to GRAIL but still managed to come in ahead of expectations. European regulators are still taking their sweet time scrutinising the GRAIL acquisition.
The company had multiple breakthroughs including the launch of the NovaSeq X Series which can sequence more than 20 000 genomes per year. About 50 of these machines have been sold already. They partnered with GenoScreen to expand global access to genomic testing for TB.
Illumina also opened its first manufacturing site in China to enable local production of instruments and consumables. Finally, they doubled down on their collaboration with AstraZeneca to accelerate drug target discovery based on humanomics insights, using both traditional routes and artificial intelligence.
This has been very rough year for growth stocks and Illumina has been no exception. The good news is that the underlying business hasn't gone backwards and there's still demand for their specialised sequencing machines. This one is going to need some patience.