Why Gilead Sciences, Inc. (NASDAQ: GILD) stock is under pressure

Gilead Sciences, Inc. (NASDAQ: GILD) stock fell after the in the fourth quarter of FY 17 results. The company has reported the net loss of $3.9 billion, compared to net income of $3.1 billion for the same period in 2016. The net loss for the fourth quarter has included an estimated $5.5 billion charge related to the enactment of the Tax Cuts and Jobs Act (Tax Reform).

GILD in the fourth quarter of FY 17 has reported the adjusted earnings per share of $1.78, beating the analysts’ estimates for the adjusted earnings per share of $1.70 as per Zacks Investment Research. The company had reported the adjusted revenue of $5.95 billion in the fourth quarter of FY 17, beating the analysts’ estimates for revenue of $5.78 billion. However, it less than the revenue of $7.3 billion for the corresponding period in 2016.

Gilead Sciences Inc

Moreover, in the fourth quarter, GILD’s total product sales is of $5.8 billion, compared to $7.2 billion for the same period in 2016. Geographic wise, the product sales in the fourth quarter of 2017 are of $4.1 billion in the United States, $1.1 billion in Europe and $553 million in other locations. This is compared to the product sales for the fourth quarter of 2016 were of $4.9 billion in the United States, $1.4 billion in Europe and $870 million in other locations. Further, the antiviral product sales, that included the sales of  HIV, chronic hepatitis B (HBV) and chronic hepatitis C (HCV) products, are of $5.2 billion for the fourth quarter of 2017 compared to $6.6 billion for the same period in 2016. Other product sales, that included Letairis (ambrisentan), Ranexa (ranolazine) and AmBisome (amphotericin B for liposome injection), are of $624 million for the fourth quarter of 2017 compared to $621 million for the same period in 2016.

Additionally, in the fourth quarter the R&D expenses had fallen primarily due to the 2016 impacts of impairment charges related to IPR&D, ongoing milestone payments, up-front collaboration expenses related to Gilead’s license and collaboration agreement with Galapagos NV and Gilead’s purchase of Nimbus Apollo, Inc., partially offset by GILD’s purchase of Cell Design Labs in 2017. SG&A expenses grew in the fourth quarter primarily due to acquisition-related costs associated with GILD’s acquisition of Kite.

For FY 18, GILD expects net products sales to be in the range of $20 billion to $21 billion, and non-GAAP product gross margin to be in the range of 85% to 87%.

GILD stock has risen 11.11% in a year (source: Google Finance).

 

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