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For the second quarter, the company now expects revenue of $161 million, down from the prior guidance range of $168 to $173 million. Analysts polled by Thomson Reuters currently expect the company to post revenues of $172.55 million for the second quarter.
In its guidance provided earlier, Illumina anticipates second quarter 2009 earnings in the range of $0.27 to $0.30 per share, with stock compensation expenses of about $16 million or tax-adjusted amount of $0.08 per pro forma share.
Microarray business was indicated to be affected by several factors including delayed orders in anticipation of new, rare variant content arrays, impact of reduced foundation funding and orders directly related to stimulus funding under the American Recovery & Reinvestment Act.
The company was also in a patent infringement suit against Santa Clara-based Affymetrix, Inc. (AFFX | Quote | Chart | News | PowerRating), seeking to restrict the company from selling HT Array Plate and Scanner products, as well as for unspecified monetary damages. The litigation indicates Affymetrix's GeneChip HT Array Plate and GeneChip HT Array Plate Scanner having infringed upon Illumina's existing patent, 'Methods of Making and Using Composite Arrays for the Detection of a Plurality of Target Analytes'
Despite the challenges seen in the second quarter, the company said, it believes the fundamentals in its markets remain intact and that its competitive position, execution and new product flow are as strong as ever.
Given the fourth quarter upside opportunities related to the stimulus, offset by the near-term weakness in the array business, the company reset its fiscal 2009 revenue outlook to the original range of $690 to $720 million provided while entering the year. Analysts currently expect the company to post revenue of $717.33 million for the fiscal year 2009.
Fiscal 2009 revenue forecast was lifted to the current level after reporting a rise in first quarter profit. On April 21, 2009, the company said its first quarter profit rose to $18.8 million or $0.14 per share, as revenues surged 36% at $165.8 million.
Illumina also said it expect the stimulus funding to have a significant positive impact on its business in Q4 and in 2010, while indicating that its short-term program was affected by order delays. The delay in orders were created by customers waiting to learn the extent they would receive in incremental funding.
Delayed orders also reduced the company's revenue by around $10 million to $15 million in the first half of the year and has created uncertainty in third quarter forecast.
On May 15, 2009, brokerage Auriga USA initiated a hold rating on company shares, with a mean target of $43.40.
ILMN closed Wednesday's regular trading at $38.14, down $0.80 or 2.05%, on a volume of 4.05 million shares. In after-hours, the stock further dropped $7.17 or 18.72%, to trade at $31.02. In the last 52-week period, the stock traded in the range of $18.82 to $47.88, with a three-month average volume of 1.56 million shares.
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