Gilead Sciences Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Gilead Sciences (NASDAQ:GILD) will unveil its latest earnings on Tuesday, October 23, 2012. Gilead Sciences is a biopharmaceutical company which discovers, develops and commercializes therapies for viral diseases, infectious diseases and cancer.

Gilead Sciences Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 90 cents per share, a decline of 7.2% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved down from 91 cents. Between one and three months ago, the average estimate moved down. It has risen from 89 cents during the last month. For the year, analysts are projecting profit of $3.41 per share, a decline of 6.8% from last year.

Past Earnings Performance: The company beat estimates last quarter after falling short in the prior two. In the second quarter, the company reported net income of 94 cents per share versus a mean estimate of profit of 92 cents per share. In the first quarter, the company missed estimates by 31 cents.

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Stock Price Performance: Between July 24, 2012 and October 17, 2012, the stock price rose $18.46 (36.1%), from $51.10 to $69.56. The stock price saw one of its best stretches over the last year between December 22, 2011 and January 6, 2012, when shares rose for 10 straight days, increasing 10.5% (+$4.08) over that span. It saw one of its worst periods between October 28, 2011 and November 4, 2011 when shares fell for six straight days, dropping 4.8% (-$2.07) over that span.

Wall St. Revenue Expectations: Analysts predict a rise of 10.4% in revenue from the year-earlier quarter to $2.34 billion.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.12 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.39 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 19.1% to $4.99 billion while assets decreased 4.3% to $5.58 billion.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 9.5% in the third quarter of the last fiscal year, 10.1% in the fourth quarter of the last fiscal year and 18.5% in the first quarter before increasing again in the second quarter.

The company is trying to use this earnings announcement to rebound from income declines in the past two quarters. Net income dropped 32.1% in the first quarter and then again in the second quarter.

A Look Back: In the second quarter, profit fell 4.6% to $711.6 million (91 cents a share) from $746.2 million (93 cents a share) the year earlier, but exceeded analyst expectations. Revenue rose 12.5% to $2.41 billion from $2.14 billion.

Analyst Ratings: With 19 analysts rating the stock a buy, none rating it a sell and three rating the stock a hold, there are indications of a bullish stance by analysts.

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

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