Shares of Gilead Sciences (GILD -4.25%) are down 3.7% as of 3:30 p.m. ET Wednesday after the biopharmaceuticals giant announced mixed quarterly results relative to Wall Street’s expectations.
Why Gilead’s “strong” year wasn’t enough
Gilead’s fourth-quarter 2023 revenue declined 3.7% year over year to $7.115 billion, translating to non-GAAP (adjusted) net income of $1.72 per share (up from $1.67 per share in the same year-ago period). Analysts, on average, were expecting higher adjusted earnings of $1.76 per share on slightly lower revenue of $7.1 billion.
Gilead’s revenue decline came as lower sales of COVID-19 treatment Veklury and HIV products were only partially offset by higher oncology segment sales. Still, excluding Veklury, total product sales would have been up 7% year over year.
Gilead chairman and CEO Daniel O’Day called it “another strong year of revenue growth for Gilead’s base business, [providing] a solid foundation as we enter a new catalyst-rich phase for the company.”
What’s next for Gilead shareholders?
O’Day singled out expectations in 2024 for updates on long-acting HIV prevention and treatment, as well as advances in both the cell therapy segment and Gilead’s bladder cancer drug, Trodelvy. Shares of Gilead plunged last month after a late-stage trial of Trodelvy failed to meet its primary endpoint.
For the full year 2024, Gilead issued guidance for total product sales between $27.1 billion and $27.5 billion and adjusted earnings per share of between $6.85 and $7.25. Here again, the midpoints of both ranges were well below consensus estimates for 2024 earnings of $7.24 per share on revenue closer to $27.7 billion.
In the end, this was an underwhelming quarterly update that left little reason for Gilead bulls to cheer. The stock is simply responding in kind.
Steve Symington has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Gilead Sciences. The Motley Fool has a disclosure policy.
