Will Gilead Earnings Rebound This Quarter?
Gilead Sciences, Inc. (GILD) Healthcare - Biotechnology | Reports July 25, After Market Closes.
Key Takeaway
- The Estimize consensus is looking for earnings per share of $3.06 on $7.9 billion in revenue, 4 cents higher than Wall Street on the bottom line and $50 million on the top.
- Sales of its Hep C medications are facing their biggest obstacle with the emergence of Merck’s cheaper drug.
- Gilead’s robust pipeline bodes well moving forward but don’t expect them to turn the corner this quarter.
Healthcare is one of the most volatile industries today. A single announcement can swing a stock significantly in either direction. Gilead had been on the right side of those swings as earnings continued to rise and top expectations over the past few years. However, a dismal first quarter pushed Gilead off its proverbial pedestal. Expectations for the upcoming quarter have come down considerably in light of the weak Q1 report.
The Estimize consensus is looking for earnings per share of $3.06 on $7.9 billion in revenue, 4 cents higher than Wall Street on the bottom line and $50 million on the top. Compared to the year prior, earnings are projected to fall by 3% with sales down as much as 4%. Shares are down nearly 27% from year earlier with a majority of those losses coming in the past 3 months.
Gilead rose to prominence on the back of its Hep C and HIV medication. The company is still a dominant presence in both markets but its position has started to wane. Sales for its Hep C medications face its stiffest competition after rival Merck debuts its own drug. Merck’s cheaper Hep C drugs has already started to chip away at Gilead’s sales. Combined sales of Harvoni and Sovaldi reported a 6% decline in its first quarter earnings.
With a number of new drugs in the pipeline and the recent approval of its new HCV drug Epclusa, earnings should start stabilize. Epclusa is the first drug that treats all sub-types of hepatitis C, which analyst believe could generate $1.8 billion this year. Gilead’s pipeline also consists of 7 late stage clinical trials and another 17 phase 2 studies in progress. For now though, investors should expect results similar to the first quarter.
Photo Credit: Wellness GM
Disclosure: None.