Illumina drops after revenue warning; Rambus holders stand pat after lowered guidance

By Rebecca Melvin

New York, April 19 – Illumina Inc.’s convertibles fell sharply on an outright basis in active trade on Tuesday as shares tanked following the San Diego-based developer of genetic research tools’ warning that first-quarter revenue will be lower than expected and full-year growth will be up by only 12%, which is lower than it has been for several years, market sources said.

Illumina now expects 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 is expected to report its first-quarter results on May 3. Meanwhile, there were earnings reports released Tuesday that commanded the attention of convertibles players and generated trades.

Rambus Inc. disappointed investors with a weak outlook for the current quarter although first-quarter results met expectations. Rambus shares fell $1.23, or 9%, to $12.54, but the Rambus 1.125% convertibles due 2018, which is a thinly traded bond due to its small issue size and attractive bond profile, did not trade significantly on Tuesday.

Overall, convertibles were fairly active as equity markets pared early gains but still closed at new 2016 highs for the Dow Jones industrial average and S&P 500 stock market.

“It looks like a lot of different people were active,” a New York-based trader said, adding that his firm was active “across-the-board,” but not in any particular names. Trading was predominantly company specific, and pricing was generally firm.

© 2015 Prospect News.
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