Illumina ($ILMN) is taking a beating on Wall Street this morning after the provider of scientific tools such as DNA sequencers announced lower-than-expected earnings yesterday. Investors have reacted sharply to the dour earnings outlook, causing the San Diego-based company's stock to plummet by nearly 32% this morning.

The company said yesterday that its third-quarter revenue would be around $235 million, way south of the expectations of $278 million for the quarter, Leerink Swann analyst Dan Leonard said in a note to investors. The lower revenue numbers come amid concern about research funding in the U.S. and Europe, where labs face tight budgets that might not support big purchases of DNA sequencing systems like those that Illumina sells. The firm also sells microarray products and other scientific tools.

Illumina, a world leader in providing sequencing technology, has seen more than half of its share value wiped out this year, with most of the declines coming over the past three months. The company's share price had been growing quickly since late 2009. More recently, however, the NIH has been changing its priorities for research spending, including within the genomic research unit, which had decided to reduce its annual grants to a handful of the large academic sequencing hubs and spread its bets across a greater number of groups working on specific diseases.

"Recent checks with major centers suggest new [Illumnia] HiSeq purchases are very unlikely and some expect utilization to decline for some time," Cowen analyst Doug Schenkel said in a note to investors.

- here's the Reuters report

Related Articles:
Illumina nabs Helixis' gene tech in $105M buyout deal
Illumina snares sequencing tech in $60M buyout