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Gilead Sciences: Analysts’ Estimates after 4Q17

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Analysts’ estimates

As we discussed earlier, Gilead Sciences (GILD) surpassed analysts’ EPS (earnings per share) and revenue estimates during 4Q17. Gilead Sciences reported an EPS of $1.78 on revenues of $5.9 billion during 4Q17—an 18.7% decline in revenues compared to $7.3 billion in 4Q16. Analysts expect an EPS of $1.64 on revenues of $5.4 billion during 1Q18—a 17.4% decline in revenues compared to an EPS of $2.23 on revenues of $6.5 billion during 1Q17.

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The above chart compares the reported EPS and analysts’ EPS estimates since 1Q16. For 1Q18, the gross margin is expected to be 84.9%—compared to 88.3% in 1Q17. The EBITDA margin is expected to be 55.6% during 1Q18—compared to 63.3% in 1Q17. The net profit margin is expected to decrease to 34.3% during 1Q18—compared to 41.5% during 1Q17.

Annual estimates

Analysts expect Gilead Sciences to report an EPS of $6.44 during 2018—compared to the EPS of $8.84 during 2017. The revenues are estimated to increase to $21.3 billion during 2018—an 18.5% decline in revenues compared to $26.1 billion for 2017.

The decline in revenues is expected to be driven by lower sales of Harvoni, Atripla, Viread, Complera, Truvada, Stribild, Sovaldi, and other products including Letairis and Ranexa.

The gross margin is expected to decrease to 84.7% during 2018—compared to 86.7% during 2017. The EBITDA margin is expected to decrease to 55.8% during 2018. The net profit margin is expected to decrease to 40.0% during 2018—compared to the net profit margin of 44.6% during 2017.

The VanEck Vectors Biotech ETF (BBH) holds 11.7% of its total investments in Gilead Sciences, 8.5% in Celgene (CELG), 6.2% in Biogen (BIIB), and 5.7% in Allergan (AGN).

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