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Gilead Sciences Posts Mixed Q1 Results: ETFs in Focus

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President Trump’s failure to implement the healthcare bill and the blow to his immigration plan were positives for the biotech space (read: Trumpcare Collapse Fuels Rally in Healthcare Stocks & ETFs).


However, there is still high uncertainty surrounding his revamped healthcare bill and its supposed impact on biotech stocks. Gilead Sciences (GILD - Free Report) released its earnings for the first quarter of 2017, beating the Zacks Consensus Estimate on earnings but missing the same on revenues.


Earnings in Focus


Gilead Sciences reported first-quarter 2017 adjusted earnings of $2.20 per share (including stock based compensation) on April 26, 2017, beating the Zacks Consensus Estimate of $2.18 but down about 26.17% from $2.98 per share reported in the year-ago quarter. However, revenues of $6.505 billion missed the consensus estimate of $6.660 billion and were down over 16.50% from $7.794 billion a year ago (read: Is Pain Ahead for Healthcare ETFs After Weak JNJ Q1?).


Shares lost about 2.5% in after-hours trading on Tuesday, May 2, 2017, owing to the revenue miss.


Revenues in discussion


Total Antiviral product revenues fell to $5.841 billion from $7.183 billion a year ago.


Other product revenues fell to $536 million from $498 million a year ago.


Royalty, contract and other revenues increased to $128 million from $113 million a year ago.


Outlook


The company expects its 2017 full year net product sales to be in the range of $22.5-$24.5 billion. It expects its gross margin to be in the range of 86%-88% and effective tax rate to be between 25% and 28%.


Let us discuss some ETFs that have a significant exposure to Gilead Sciences.


VanEck Vectors Biotech ETF BBH


This fund seeks to provide exposure to the biotech industry. It has AUM of $684.5 million and charges a fee of 35 basis points a year. The fund has 10.19% exposure to Gilead Sciences (as of May 2, 2017). The fund returned 18.79% in the past one year and 13.65% in the year-to-date time frame (as of May 2, 2017). It currently has a Zacks ETF Rank #3 (Hold) with a High risk outlook.


iShares Nasdaq Biotechnology ETF IBB


This fund has AUM of $8.19 billion and charges a fee of 47 basis points a year. The fund has 7.63% exposure to Gilead Sciences (as of May 2, 2017). The fund returned 15.60% in the past one year and 12.39% in the year-to-date time frame (as of May 2, 2017). It currently has a Zacks ETF Rank #3 with a High risk outlook.


PowerShares Dynamic Pharmaceuticals Portfolio ETF PJP


This fund has AUM of $767.5 million and charges a fee of 57 basis points a year. The fund has 4.97% exposure to Gilead Sciences (as of May 1, 2017). The fund lost 0.03% in the past one year but gained 8.71% in the year-to-date time frame (as of May 2, 2017). It currently has a Zacks ETF Rank #3 with a High risk outlook.


Below is a chart comparing the performance of the funds and Gilead Sciences.

Source: Yahoo Finance
 
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