Gilead Sciences Inc. (NASDAQ: GILD) will report its first-quarter earnings Thursday after the markets close. Thomson Reuters has consensus estimates of $2.32 in earnings per share (EPS) on $6.92 billion in revenue. The first quarter from last year had $1.48 in EPS on $5.00 billion in revenue.
According to Jefferies, this top biotech stock saw its revenue increase over the past 12 months to the tune of 16.2%. With a host of top-selling drugs and an incredible pipeline, the company is poised for an outstanding 2015 and beyond.
UBS looks at Gilead favorably for capital returns. The company announced in early February that it is taking a page from the big pharmaceuticals by initiating its first-ever dividend. While the stock was hammered at that time, since the beginning of the year, and due to a price war with AbbVie for hepatitis C (HCV) drugs, it appears as though the data for the company’s top HCV drugs, Sovaldi and Harvoni, is positive, and they continue to sell well. Current estimates are tracking to come in at the high end of the 2015 guidance.
A strong dollar and a weaker euro in this current environment are hurting U.S. corporate earnings. Some might believe that biotech earnings growth is limitless because of what they can charge for their treatments. However, even the hot biotech sector has to worry about what kind of impact the strong U.S. dollar might have in terms of cutting into earnings.
As a result Gilead issued 2015 sales guidance of $26 billion to $27 billion on February 4, when EUR/USD rate stood at $1.14, compared to the current rate of $1.06, a difference of 7%. Note that Gilead had 26% of its 2014 sales outside the United States, and the mix is expected to be similar for 2015. Historically, Gilead recorded a $39 million positive currency exchange impact on revenues in 2014 and a $65 million negative impact in 2013, with the euro primarily hedged.
For the most recent settlement date, Gilead saw its short interest remain relatively flat at 57.43 million shares, up marginally from 57.31 million. Investors seem to have increased their pessimism compared to recent months.
24/7 Wall St. also just ran a preview for rival biotech company Celgene.
Wednesday afternoon, Gilead Shares were down 1% at $102.56 on a 52-week trading range of $75.49 to $116.83. The company’s stock has a consensus analyst price target of $117.99.
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