Gilead Sciences Inc. Earnings: Margins Keep Shrinking, but Net Income Increases

S&P 500 (NYSE:SPY) component Gilead Sciences Inc. (NASDAQ:GILD) reported its results for the fourth quarter. Gilead Sciences is a biopharmaceutical company which discovers, develops and commercializes therapies for viral diseases, infectious diseases and cancer.

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Gilead Earnings Cheat Sheet for the Fourth Quarter

Results: Net income for Gilead Sciences Inc. rose to $665.1 million (87 cents per share) vs. $629.4 million (76 cents per share) in the same quarter a year earlier. This marks a rise of 5.7% from the year earlier quarter.

Revenue: Rose 10.1% to $2.2 billion from the year earlier quarter.

Actual vs. Wall St. Expectations: Gilead Sciences Inc. reported adjusted net income of 97 cents per share. By that measure, the company fell short of mean estimate of $1 per share. Analysts were expecting revenue of $2.18 billion.

Key Stats:

Last quarter marked the fifth straight quarter that the company saw shrinking gross margins as gross margin fell 1.7 percentage points to 73.4% from the year earlier quarter. Over that time, margins have contracted on average 1.7 percentage points per quarter on a year-over-year basis.

The company has now seen net income rise in three straight quarters. In the third quarter, net income rose 5.1% and in the second quarter, the figure rose 4.8%.

Revenue has now gone up for three straight quarters. In the third quarter, revenue rose 9.5% to $2.12 billion while the figure rose 10.9% in the second quarter from the year earlier.

The company fell short of estimates last quarter after beating the mark the quarter before with net income of 97 cents versus a mean estimate of net income of 96 cents per share.

Looking Forward: Analysts appear increasingly negative about the company’s results for the next quarter. The average estimate for the first quarter of the next fiscal year has moved down from $1.04 a share to 98 cents over the last ninety days. The average estimate for the fiscal year is $3.74 per share, down from $3.76 ninety days ago.

(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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To contact the reporter on this story: Derek Hoffman at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com