- Gene-sequencer loses 16% in after-hours trading
- Forecasts missed and full-year guidance slashed
- Illumina fifth biggest stake of popular growth fund Scottish Mortgage
Illumina (ILMN:NASDAQ) shares dived 16% after-hours after the gene-sequencing technology company plunged to a loss in the second quarter and revenues fell short of expectations. Perhaps worse, it lowered its full-year outlook.
The company said in its second-quarter release that it expects full-year revenue for 2022 to grow between 4% and 5% this year, flagging ‘ongoing negative impact of foreign exchange rates, customer lab expansion delays, and macroeconomic-driven conservatism around immediate capital and inventory commitments, including in Greater China.’
Last quarter, the company said it expected 14% to 16% revenue growth for fiscal-year 2022.
This will mean Illumina posting a per share loss in the region of $2.78 to $2.93 for the full year. Analysts had expected positive earnings of $2.94 a share.
MISSING FORECASTS
Illumina reported a Q2 loss of $535 million, or $3.40 a share, compared with net income of $187 million, or $1.26 a share, in Q2 2021. Adjusted for $609 million in legal contingencies, and general administration costs, earnings were $0.57 a share on revenue up from $1.13 billion to $1.16 billion last year.
Analysts surveyed by FactSet had forecast earnings of $0.64 cents a share on revenue of $1.22 billion.
The miss comes as a blow to millions of UK growth investors who own shares in popular investment trust Scottish Mortgage (SMT).
Tesla is Scottish Mortgage’s third biggest stake
It has 4% of its £13.6 billion assets tied up in Illumina stock, worth around £544 million. That means as Illumina fell from $227.44 to $192 overnight, it saw Scottish Mortgage shares lose around 2% in Friday trading (12 Aug) at 908.4p.
PLUG PULLED ON SCOTTISH MORTGAGE BOUNCE
Scottish Mortgage shares have risen by more than 18% over the past month as investor fears over inflation have eased.
Illumina’s stock plunge means four of Scottish Mortgage’s top five stakes have lost value over the past week, with Moderna (MRNA:NASDAQ), ASML (ASML:AMS) and Tesla (TSLA:NASDAQ) down 9%, 4% and 5% respectively.
DISCLAIMER: Steven Frazer, the author of this article, owns shares in Scottish Mortgage.
