Gilead quarterly results beat Street estimates as lower taxes boost profit

FILE PHOTO: Gilead Sciences Inc pharmaceutical company is seen during the outbreak of the coronavirus disease (COVID-19), in California

By Deena Beasley

(Reuters) -Drugmaker Gilead Sciences on Tuesday said its third-quarter sales were little changed from a year earlier, but earnings rose 21% due mainly to lower taxes.

The Foster City, California-based company reported a quarterly profit of $2.29 per share excluding items, on revenue of $7.1 billion, up from $1.90 a share on revenue of just over $7 billion in the year-ago quarter.

Wall Street analysts had expected an adjusted profit of $1.92 per share on revenue of $6.8 billion, according to LSEG data.

Sales of HIV drug Biktarvy rose 12% to $3.1 billion, which was in line with analysts' estimates. Sales of COVID drug Veklury fell 31% to $636 million, but still came in well above Wall Street expectations of $363 million.

Oncology sales rose 33% to $769 million.

"Overall product sales excluding COVID grew 5% year-over-year so there continues to be modest organic growth - though investors would like to see more growth beyond just HIV," Jefferies analyst Michael Yee said in a research note.

Shares of Gilead were down by 1.25% at $79.60 in after-hours trading.

"We are seeing strong growth in our core base business," Gilead CEO Daniel O'Day said in an interview.

He noted that Gilead will be announcing results from several pivotal-stage clinical trials next year, including Trodelvy as a first-line treatment for lung cancer and oral antiviral obeldesivir as a treatment for COVID.

Gilead said its effective tax rate for the third quarter dropped to 6.3% from 26.6% for the same period in 2022, primarily due to a settlement with the U.S. Internal Revenue Service for prior tax years.

For 2024, Gilead said it continues to expect a tax rate of 16% percent.

Gilead raised its full-year forecast for adjusted earnings and now expects $6.65 to $6.85 per share, up from $6.45 to $6.80. The company also increased its 2023 revenue estimate to a range of $26.7 billion to $26.9 billion from a previous forecast of $26.3 billion to $26.7 billion.

Analysts have projected 2024 earnings of $6.61 per share on revenue of $26.9 billion.

(Reporting By Deena Beasley; Editing by Bill Berkrot and Jonathan Oatis)