Are Gilead Earnings Enough for Investors?

Health and Healthcare

Published: October 27, 2015 4:22 pm

Last Updated: April 27, 2020 4:31 pm

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Gilead Sciences Inc. (NASDAQ: GILD) reported its third-quarter financial results after the markets closed on Tuesday. The company had $3.22 in earnings per share (EPS) on $8.3 billion in revenue, which compares to consensus estimates from Thomson Reuters of $2.87 in EPS on $7.82 billion in revenue. The same period from the previous year had $1.84 in EPS on $6.04 billion in revenue.

Perhaps the number that most investors were watching in this report was the worldwide hepatitis C vaccine sales of $4.798 billion versus analysts’ estimates of $4.5 billion.

Product sales in the U.S. totaled $5.6 billion compared to $4.2 billion last year. In Europe, product sales rang in at $1.7 billion compared to $1.4 billion for the same period in 2014. Sales in other international locations increased to $1.0 billion compared to $327 million primarily as a result of the launch of HCV products in Japan.

On the books, Gilead had $25.1 billion in cash, cash equivalents and marketable securities compared to $14.7 billion as of June 30, 2015. This increase was primarily driven by the issuance of senior unsecured notes in September 2015 for a total aggregate principal amount of $10.0 billion. During the third quarter, the company generated $4.1 billion in operating cash flow, utilized $3.1 billion to repurchase 28 million shares and paid a cash dividend of $0.43 per share, totaling $627 million.

Separately, the company announced that the board of directors declared a cash dividend of $0.43 per share of common stock for the fourth quarter. The dividend will be payable on December 30, to stockholders of record at the close of business on December 16.

Shares of Gilead closed Tuesday up 2.1% at $110.96, with a consensus analyst price target of $124.25 and a 52-week trading range of $85.95 to $123.37. Following the release of the earnings report, shares were initially down 1.5% at $10.25 in the after-hours trading session.

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