Gilead Sciences Meets on the Top Line, Misses Where it Counts

Seth Jayson, The Motley Fool
Updated

Gilead Sciences (NAS: GILD) reported earnings on Feb. 2. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), Gilead Sciences met expectations on revenues and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue expanded and GAAP earnings per share grew.

Margins contracted across the board.

Revenue details
Gilead Sciences reported revenue of $2.20 billion. The 22 analysts polled by S&P Capital IQ anticipated revenue of $2.18 billion. Sales were 10% higher than the prior-year quarter's $2.00 billion.

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.97. The 25 earnings estimates compiled by S&P Capital IQ forecast $1.04 per share on the same basis. GAAP EPS of $0.87 for Q4 were 14% higher than the prior-year quarter's $0.76 per share.

anImage
anImage

Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 73.4%, 180 basis points worse than the prior-year quarter. Operating margin was 39.4%, 960 basis points worse than the prior-year quarter. Net margin was 30.2%, 130 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $2.22 billion. On the bottom line, the average EPS estimate is $1.00.

Next year's average estimate for revenue is $9.09 billion. The average EPS estimate is $4.13.

Investor sentiment
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 2,105 members out of 2,164 rating the stock outperform, and 60 members rating it underperform. Among 621 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 612 give Gilead Sciences a green thumbs-up, and nine give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Gilead Sciences is outperform, with an average price target of $49.29.

The biotechnology and healthcare investing landscape is littered with also-rans and a few major winners. Is Gilead Sciences the right stock for you? Read "Discover the Next Rule-Breaking Multibagger" to learn about a company David Gardner believes will be a phenomenal success over the next few years. Click here for instant access to this free report.

At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of Gilead Sciences. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Copyright © 1995 - 2012 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Advertisement