Will Increased Competition Hurt Gilead’s Outlook?
Gilead Sciences reported better-than-expected fourth-quarter results Tuesday after the markets closed.
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Gilead Sciences Inc. (NASDAQ: GILD) reported its fourth-quarter results Tuesday after the markets closed as $2.43 in earnings per share (EPS) and $7.3 billion in revenue, against Thomson Reuters consensus estimates of $2.22 in EPS and $6.72 billion in revenue. The fourth quarter from the previous year had $0.55 in EPS and $3.12 billion in revenue.
The company gave guidance for the 2015 full year. Net product sales are expected to be in the range of $26 billion to $27 billion and gross margin is expected to be 87% to 90%. There are consensus estimates for the 2015 full year of $9.79 in EPS and $28.65 billion in revenue.
The board of directors announced that it had authorized a dividend program where the company intends to pay quarterly dividends of $0.43 per share beginning in the second quarter of 2015. Dividend payments are subject to quarterly declarations by the board of directors.
A share repurchase program of $15 billion in common stock was also approved by Gilead’s board. This new program adds to the currently authorized three-year $5.0 billion repurchase program from May 2014, of which $3 billion remained at the end of December.
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For 2014, antiviral product sales were $22.8 billion compared to $9.3 billion in 2013. The increase in the quarter and full year was primarily driven by sales of Sovaldi. Sovaldi had sales of $1.73 billion globally for the fourth quarter and Harvoni had global sales of $2.11 billion.
Gilead had $11.7 billion of cash, cash equivalents and marketable securities, compared to $2.6 billion as of the end of December 2013. During 2014, Gilead generated $12.8 billion in operating cash flow and utilized $5.3 billion to repurchase shares.
John Martin PhD., chairman and CEO of Gilead, said:
The past year was marked by the launch of our first oncology product, second HCV medication, regulatory filings for the next generation HIV medicine, E/C/F/TAF, and a doubling of product revenues relative to 2013. We are entering 2015 with financial strength, a portfolio of 19 marketed products that are addressing significant unmet medical needs and a pipeline for which we expect a number of milestones and data readouts during the coming year.
In mid-to-late January, a few analysts weighed in on Gilead:
- Needham had a Buy rating with a price target of $120.
- Nomura reiterated a Buy rating with a price target of $146.
- Maxim Group had a Buy rating with a price target of $127.
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Shares of Gilead closed Tuesday up 1% at $107.15. In after-hours trading, after the earnings report was released, shares were down 3.5% at $103.35. The stock has a consensus analyst price target of $122.58 and a 52-week trading range of $63.50 to $116.83.
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Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics. Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications. A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.
