Bill Martin, editor of FindProfit recently added Gilead Sciences Inc. (NASDAQ: GILD) to his long-term growth portfolio, and the stock has risen sharply following a strong fourth quarter report.
According to Martin, the company saw particular strength in its HIV franchise. He explains, "Gilead's HIV treatments (Viread, Truvada, Atripla, and Emtriva) were clear winners, with sales growing 67% to $642.4 million and surpassing Wall Street's expectation of $628.7 million in sales."
Although the company reported a net loss of $1.67 billion, or -$3.62 per share, for the quarter, the advisor explains that by backing out a charge of $2.04 billion for its acquisitions of Corus and Myogen, the company actually earned a profit of 78 cents per share versus 59 cents per share a year ago.
Also for the quarter, he notes that revenue jumped 48% year over year to $899.2 million. These results, he points out, "handily" beat analyst expectations of 68 cents EPS on revenue of $850.9 million.
In addition to its HIV drugs, Martin notes that Gilead saw growth in its royalty revenue for the quarter that was up 13% to $131.1 million from a year ago, primarily due to the royalties paid by Roche for Tamiflu.
Commenting on the company's conference call, martin notes that the company is now forecasting total product revenue of $3.4-$3.5 billion for 2007. He qualifies this by noting that the company has a policy of excluding new product launches from its revenue guidance.
He also notes that the company provided a positive pipeline report, as well as plans to get "more aggressive with its R&D spending, as it looks to build out its medium- to long-term pipeline and to better compete with peers."
The bottom line, he says "is that GILD delivered an extremely strong quarter, as its HIV franchise continued to build steam. This led to upside in both earnings and revenues, and Wall Street analysts are scrambling today to hike their 2007 and 2008 earnings estimates." The advisor's conclusion: "We remain upbeat about GILD for long-term focused accounts."
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