DNA analysis technology maker Illumina (ILMN) are coming under heavy pressure Wednesday, down $6.74, or 18%, at $31.40, after the company said June-ending Q2 revenue would be about $161 million, well below the company’s prior forecast range of $168 million to $173 million, and below analysts’ average estimate of $172 million.
The company attributed the reduction in outlook to a shortfall in sales of its DNA arrays because of three factors: customers delaying purchase awaiting new “rare variant content arrays”; the impact of reduced foundation funding; and delays in orders using money tied to U.S. economic stimulus programs, such as the Reinvestment and Recovery Act.
The delay in stimulus-driven spending, moreover, has created delays about Q3’s order rate, the company said. Because of that, the company reverted from the $700 million to $720 million revenue forecast for 2009 offered back in April to a January range of $690 million to $720 million.
A lesson in expensive stocks, perhaps: At today’s close of $38 and change, Illumina was trading at 42 times this year’s projected 90 cents per share in profit.