Illumina cuts annual profit forecast for second straight quarter

(Reuters) – U.S. genetic testing Illumina (NASDAQ:) on Thursday trimmed its annual profit forecast for the second straight quarter, hurt by weakness in demand for its sequencing instruments, consumables and services.

Shares of the San Diego, California-based company fell about 9% to $97.51 in extended trading, after it also missed Wall Street estimates for third-quarter sales.

The U.S. life sciences firm in the last quarter had flagged weakness in demand for its genetic testing tools and diagnostics products over protracted recovery in China, cautious consumer spending and lengthened sales cycles.

Sales at its core business, which advances sequencing instruments, consumables and services for genetic analysis, were $941 million in the third quarter, compared with LSEG estimates of $963.80 million.

Illumina also disclosed it recognized $712 million in goodwill and $109 million in intangible asset impairment related to the Grail segment, in the quarter.

The company’s deal for cancer test maker Grail is facing pressure from antitrust regulators. Illumina said last month it would divest Grail in 12 months, according to the terms of the European Commission’s order, if it does not win its challenge in court.

Illumina sees full-year adjusted profit per share to be between $0.60 and $0.70, versus its prior forecast range of $0.75 to $0.90.

It makes tools and provides sequencing services to hospitals, biotech and pharmaceutical companies for disease research and drug development process. It also makes and sells molecular diagnostic tests.

Its total revenue was $1.12 billion for the third quarter, compared with analysts’ average estimate of $1.13 billion.

It expects FY23 consolidated revenue to decrease 2% to 3% from FY22.

On an adjusted basis, the company earned 33 cents per share during the quarter, versus analysts’ estimate of 12 cents per share.