Illumina's Q1 Revenue Drop, Dwindling Margins: Outlines Cost Cutting Plans With $100M Savings

In its Q1 earnings release, Illumina Inc ILMN unveiled plans to accelerate margin improvement and create flexibility for further investment in high-growth areas.
The company aims to reduce its annualized run rate expenses by more than $100 million starting later this year.
Q1 Revenue of $1.09 billion was down 11% Y/Y (down 9% on a constant currency basis), beating the consensus of $1.07 billion.
Adjusted EPS of $0.08 declined from $1.07 a year ago, beating the consensus of $0.02.
Also Read: Carl Icahn Steps Up Battle With Illumina, Says Directors Asked Additional Insurance For Grail Deal.
The company reported gross margins of 60.3% for the period, down from 66.6% during the year-earlier period.
Illumina also plans to save by "enabling activities" in more cost-effective hubs.
The Federal Trade Commission has ordered Illumina to divest Grail Inc, saying that the deal would stifle competition and innovation in the U.S. market for cancer tests.
Illumina will appeal the FTC's decision and seeks to arrive at a resolution by late 2023 or early 2024, the company said in a statement.
Guidance: Illumina reiterates adjusted EPS guidance of $1.25-$1.50 for fiscal year 2023 versus the consensus of $1.41.
The company commits to achieving Core Illumina adjusted operating margins of 25% in 2024 and 27% in 2025.
Price Action: ILMN shares are down 0.40% at $217.81 during the premarket session on the last check Wednesday.

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