Morning Commentary: Illumina drops after lowering revenue guidance; Rambus quiet post earnings

By Rebecca Melvin

New York, April 19 – Illumina Inc.’s convertibles fell outright in active trade as shares tanked after the San Diego-based developer of genetic research tools announced a lowered revenue estimate for its first quarter and said full-year growth will be 12%, lower than it has been in several years, market sources said.

Illumina said it expected revenue of $572 million, which was below its original forecast of $596 million. The problem was weak sales of its HiS-eq 2500, 3000 and 4000 instruments, the company said.

Illumina shares dropped $44.00, or 25%, to $134.16.

Illumina’s 0.5% convertible note due 2021, or the B tranche, fell 8 points on an outright basis to about 104, which was down from 112.

Illumina 0% convertible due 2019, or the A tranche, fell to 103 from about 108. It was not yet known how the bonds performed on a dollar-neutral, or hedged, basis.

Illumina’s older 0.25% convertibles due 2016 matured March 15.

Illumina is expected to report first-quarter results on May 3.

A few earnings reports were also in focus in U.S. convertibles early Tuesday, including Rambus Inc.’s, although Rambus’ 1.125% convertibles due 2018 did not appear to have traded after the Los Altos, Calif.-based technology licensing company reported earnings that met expectations but disappointed investors with a weak outlook for the current quarter.

The Rambus 1.125% convertibles were last at 126.5. Rambus shares early Tuesday were down $1.14, or 8%, at $12.64.

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