Gilead Sciences Posts Mixed Q1 Results: ETFs In Focus

President Trump’s failure to implement the healthcare bill and the blow to his immigration plan were positives for the biotech space (read: Trumpcare Collapse Fuels Rally in Healthcare Stocks & ETFs).

However, there is still high uncertainty surrounding his revamped healthcare bill and its supposed impact on biotech stocks. Gilead Sciences (NASDAQ:GILD) released its earnings for the first quarter of 2017, beating the Zacks Consensus Estimate on earnings but missing the same on revenues.

Earnings in Focus

Gilead Sciences reported first-quarter 2017 adjusted earnings of $2.20 per share (including stock based compensation) on April 26, 2017, beating the Zacks Consensus Estimate of $2.18 but down about 26.17% from $2.98 per share reported in the year-ago quarter. However, revenues of $6.505 billion missed the consensus estimate of $6.660 billion and were down over 16.50% from $7.794 billion a year ago (read: Is Pain Ahead for Healthcare ETFs After Weak JNJ Q1?).

Shares lost about 2.5% in after-hours trading on Tuesday, May 2, 2017, owing to the revenue miss.

Revenues in discussion

Total Antiviral product revenues fell to $5.841 billion from $7.183 billion a year ago.

Other product revenues fell to $536 million from $498 million a year ago.

Royalty, contract and other revenues increased to $128 million from $113 million a year ago.

Outlook

The company expects its 2017 full year net product sales to be in the range of $22.5-$24.5 billion. It expects its gross margin to be in the range of 86%-88% and effective tax rate to be between 25% and 28%.

Let us discuss some ETFs that have a significant exposure to Gilead Sciences.

VanEck Vectors Biotech ETF (LON:BBH)

This fund seeks to provide exposure to the biotech industry. It has AUM of $684.5 million and charges a fee of 35 basis points a year. The fund has 10.19% exposure to Gilead Sciences (as of May 2, 2017). The fund returned 18.79% in the past one year and 13.65% in the year-to-date time frame (as of May 2, 2017). It currently has a Zacks ETF Rank #3 (Hold) with a High risk outlook.

iShares Nasdaq Biotechnology ETF IBB

This fund has AUM of $8.19 billion and charges a fee of 47 basis points a year. The fund has 7.63% exposure to Gilead Sciences (as of May 2, 2017). The fund returned 15.60% in the past one year and 12.39% in the year-to-date time frame (as of May 2, 2017). It currently has a Zacks ETF Rank #3 with a High risk outlook.

PowerShares Dynamic Pharmaceuticals Portfolio ETF (WA:PJP)

This fund has AUM of $767.5 million and charges a fee of 57 basis points a year. The fund has 4.97% exposure to Gilead Sciences (as of May 1, 2017). The fund lost 0.03% in the past one year but gained 8.71% in the year-to-date time frame (as of May 2, 2017). It currently has a Zacks ETF Rank #3 with a High risk outlook.

Below is a chart comparing the performance of the funds and Gilead Sciences.

Source: Yahoo (NASDAQ:YHOO) Finance

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