Why did Illumina stock drop today? Q2 revenue miss, guidance cut
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A less than desirable earnings report sent the shares of gene sequencing company Illumina (NASDAQ:ILMN) ~8% lower on Friday, the highest intraday decline since June, adding to its woes related to the controversial GRAIL acquisition. 
After revenue for the quarter dropped ~5% sequentially to $1.16B, the management blamed the macroeconomic environment for the underperformance.
Meanwhile, Illumina (ILMN) swung to a net loss of $535M for the quarter from $185M of net income in Q2 2022, driven by $609M in legal contingencies, which included a $453M accrual for a potential fine from the European Commission over the GRAIL acquisition.
Illuminaâs (ILMN) early closure of the $8B cash-and-stock deal in 2021 amid anti-trust concerns has drawn regulatory scrutiny in the EU.
ââ¦.Our second quarter results were impacted by macroeconomic challenges that we expect to play out over the next couple of quarters,â Chief Executive Francis deSouza noted as the company lowered the 2022 outlook.
Asked about a potential unwinding of the GRAIL acquisition due to regulatory uncertainty, deSouza said during the earnings call that the combination âcreates the most long-term shareholder value.â
Noting that GRAIL managed to record the fastest revenue growth of any cancer screening test in history, mainly on its own, deSouza said: âAnd I imagine what that could have been in the power of Illumina behind it.â
Wall Street has remained bullish on Illumina (ILMN) stock, with an average rating of Buy from analysts. However, Seeking Alpha Author ratings and our Quant System, which consistently beats the market, rate ILMN as a Hold.