Gilead Sciences (NASDAQ:GILD), Healthcare - Biotechnology | Reports April 28, After Market Closes.
Key Takeaway:
- The Estimize consensus is calling for earnings per share $3.23 on $8.21 billion in revenue, 11 cents higher than Wall Street on the bottom and $130 million on the top
- Gilead’s recent string of success can be attributed to the strength of its antiviral portfolio
- Merck (NYSE:MRK) recently launched a cheaper Hepatitis C drug which will put pressure Gilead’s margins and sales.
Biopharmaceutical company, Gilead Sciences, is scheduled to report first quarter earnings after the market closes. Gilead has been a hot streak the past 2 fiscal years, beating in 7 of the past 8 reported quarters. Given its track record, it won’t be surprising if Gilead posts another win with its Q1 results. The Estimize consensus is calling for earnings per share $3.23 on $8.21 billion in revenue, 11 cents higher than Wall Street on the bottom and $130 million on the top. Estimates have been on the move since its last report. Earnings per share estimates have increased 10% with revenue also up 4%. Compared to a year earlier, profits are forecasted to rise 10% while sales could increase 8%
Strong earnings have not translated to the market. Gilead stock is down 3% from the prior year and 8% in the past 6 months alone. Fortunately, the stock moves in investors favor throughout earnings season. In the 30 days prior to earnings, shares typically increase 6% and continue to do so through the 30 days following results. 
Over the last four quarters Gilead has posted positive earnings surprises of 5.9% on average, and is expected to beat again this Wednesday. Gilead is the market leader in Hepatitis C treatments, with two popular drugs Sovaldi and Harvoni. Their Hep C franchise, along with other antivirals, make up 90% of the company’s revenue stream. However, the benefit of these drugs to the bottom-line is waning as they have been on the market for a year and half now and are also curative. More competition is set to hit the Hep C market soon, with Merck recently approved to release its rival drug. Merck’s treatment imposes a direct threat to Gilead especially since the drug is cheaper than Harvoni.
In order to diversify revenues, Gilead is focusing on growing other core offerings including HIV and Hep B treatments. Newly launched Zydelig, a treatment for three forms of cancer, is performing well and with a number of new drugs already FDA approved, this could lead to strong revenue growth in the near future. In addition to a solid product portfolio, Gilead possess a robust pipeline of potential products. Additional acquisitions and licensing agreements could help Gilead reach these goals. 
Do you think GILD can beat estimates?