Gilead Sciences, Inc. (GILD) is set to report second quarter 2014 results on Jul 23 after the market closes. Last quarter, the company delivered a positive earnings surprise of 92.00%. Let's see how things are shaping up for this announcement.
Factors Influencing this Quarter
We expect a meaningful contribution from blockbuster hepatitis C virus treatment, Sovaldi, in the second quarter as well. The drug, approved in the U.S. in Dec 2013 and in Europe in Jan 2014, recorded sales of $2.3 billion in its first full quarter on the market. Moreover, the anti-viral franchise at Gilead is expected to continue to perform well this quarter driven by treatments like Complera and Stribild. The strong performance of these products will drive the top line higher.
However, the bottom line is expected to be affected by higher operating costs as Gilead continues to develop its pipeline. Costs associated with the marketing of Sovaldi will also cause operating expenses to escalate.
Earnings Whispers?
Our proven model however does not conclusively show that Gilead is likely to beat earnings this quarter. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank of #1, 2 or 3 for this to happen. That is not the case here as you will see below.
Zacks ESP: The Earnings ESP for Gilead is -2.48% since the Most Accurate Estimate stands at $1.57, below the Zacks Consensus Estimate of $1.61.
Zacks Rank #3 (Hold): Gilead’s Zacks Rank #3 when combined with a -2.48% ESP makes surprise prediction difficult.
Other Stocks to Consider
Here are some companies you may want to consider as our model shows that they have the right combination of elements — a positive Zacks Earnings ESP and a Zacks Rank #1, #2 or #3
Celgene Corporation (CELG) has an Earnings ESP of +2.60% and holds a Zacks Rank #2 (Buy). Celgene will be reporting second quarter earnings on Jul 24, before market opens.
Hospira Inc. (HSP) has an Earnings ESP of +1.79% and holds a Zacks Rank #1 (Strong Buy). Hospira will be reporting second quarter earnings on Jul 30 before market opens.
Teva Pharmaceutical Industries Limited (TEVA) has an earnings ESP of +6.67% and holds a Zacks Rank #2. Teva will report second quarter earnings on Jul 31, before market opens.
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