What to expect from Gilead Sciences Q3 earnings

Gilead Sciences (NASDAQ: GILD) is set to report its third-quarter earnings results on Thursday after the market closes. The biotechnology firm is likely to experience an increase in the costs and expenses as well as the lower patient starts for chronic hepatitis C virus (HCV) products.

The company will incur additional expenses related to the transformative research and development collaboration with Galapagos NV (NASDAQ: GLPG) as Gilead will make $3.95 billion upfront payment and $1.1 billion equity investment.

The top line will be benefited by the continued prescription demand growth of Biktarvy, Genvoya, Descovy, and Odefsey in the HIV product class. On the other hand, the competitive pressure is likely to hurt the HCV product segment, which will likely lower the sales of Harvoni and Epclusa across all major markets.

Gilead’s stock continued to remain lackluster as more products are on queue for trials result. The stock has fallen over 8% in the past year while it has risen over 6% in the year so far. The shares have been fluctuating between a low of $60.32 and a high of $72.90 in the past 52 weeks. It has a 50-day moving average of $64.54 and a 200-day moving average of $65.32.

Analysts expect the company’s earnings to fall by 5.40% to $1.74 per share while revenue will rise by 0.3% to $5.61 billion for the third quarter. The company has surprised investors by beating analysts’ expectations thrice in the past four quarters. The majority of the analysts recommended a “hold” rating with an average price target of $79.97.

Read: Biogen Q3 earnings review

For the second quarter, Gilead Sciences reported a 5% rise in earnings as higher sales volume of HIV product offset the sales decline in chronic HCV product. Product sales rose by 1% as a result of the continued uptake of HIV injection Biktarvy and an increase in the number of Yescarta cancer therapies provided to patients.

Looking ahead into the full year 2019, the company expects product sales in the range of $21.6 billion to $22.1 billion and adjusted earnings in the range of $3.90 to $4.00 per share. The research and development expenses are anticipated to be in the range of $3.6 billion to $3.8 billion and selling, general, and administrative expenses are predicted to be $3.9 billion to $4.1 billion.

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