Biopharmaceutical company Gilead Sciences, Inc. (NASDAQ: GILD) reported a decline in fourth-quarter earnings, despite a modest increase in revenues. Earnings fell short of expectations, while revenues beat. The company’s stock dropped soon after the announcement during Monday’s extended trading session.
Fourth-quarter adjusted earnings decreased to $1.30 per share from $1.44 per share a year earlier. Analysts were looking for a bigger bottom-line number.
Gross margin was negatively impacted by an increase in selling costs amid inventory write-downs, which was partially offset by lower royalty expenses and R&D expenses.
Net income, on an unadjusted basis, came in at $2.7 billion or $2.12 per share, compared to flat earnings in the prior-year period. The improvement primarily reflects favorable tax effects and gains from equity securities.
Revenue up
Revenues, meanwhile, edged up 1% year-over-year to $5.88 billion and exceeded the market’s prediction. At $5.8 billion, product sales were up 2%. Product sales in the U.S market were unchanged from the prior-year period, but Europe registred a model decline.
Product-wise, higher sales volumes of HIV drug Biktarvy pushed up overall sales. However, it was partially offset by a drop in the sales of chronic hepatitis C virus products.
Outlook
For fiscal 2020, the company currently forecasts product sales in the range of $21.8 billion to $22.2 billion, and unadjusted earnings between $5.15 per share and $5.55 per share. On an adjusted basis, full-year earnings are forecast to be in the $6.05-$6.45 range. The management sees research and development expenses to increase in the mid-single-digit percentage.
Gilead Sciences shares made strong gains this week and closed Tuesday’s regular session higher. The stock, which witnessed significant volatility in the past twelve months, rose 17% since the beginning of the year.
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