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GILD or ABBV: Which Is Expected to Report Faster EPS Growth?

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Feb. 21 2019, Updated 2:25 p.m. ET

EPS guidance for 2019

In its fourth-quarter earnings presentation, Gilead Sciences (GILD) guided for a GAAP (generally accepted accounting principles) to non-GAAP adjustment of $1.40–$1.50 in its EPS in 2019. In 2018, the company reported non-GAAP EPS of $6.67, a YoY (year-over-year) fall of 24%. In the fourth quarter, the company reported non-GAAP EPS of $1.44, a YoY fall of 19% and a sequential fall of 22%.

In its fourth-quarter earnings presentation, Gilead Sciences guided for a non-GAAP product gross margin of 85%–87% in 2019.

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According to its fourth quarter earnings conference call, AbbVie (ABBV) expects its 2019 adjusted EPS and its first-quarter adjusted EPS to fall in the ranges of $8.65–$8.75 and $2.05–$2.07, respectively. The company has also forecast an adjusted gross margin and an operating margin of just above 82.5% and 46.5%, respectively, for 2019.

Wall Street’s projections

Wall Street analysts expect Gilead Sciences’ adjusted EPS to be $6.63, $6.97, and $7.07, respectively, in 2019, 2020, and 2021, implying YoY changes of -0.63%, 5.09%, and 1.49%, respectively. Analysts also expect Gilead Sciences’ gross margins to be 85.98%, 86.42%, and 86.22%, respectively, in 2019, 2020, and 2021.

On the other hand, Wall Street analysts expect AbbVie’s adjusted EPS to be $8.69, $9.44, and $10.30, respectively, in 2019, 2020, and 2021, implying YoY growth of 9.85%, 8.68%, and 9.07%, respectively. Analysts also expect AbbVie’s gross margins to be 82.60%, 81.96%, and 81.12%, respectively, in 2019, 2020, and 2021.

AbbVie is expected to report higher YoY EPS growth from 2019 to 2021 compared to Gilead Sciences. On the other hand, Gilead Sciences is expected to report higher gross margins than AbbVie from 2019 to 2021.

Next, we’ll discuss expense projections for Gilead Sciences and AbbVie in 2019.

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