We will study the stock price and quarterly EPS trends of Gilead Sciences「GILD」, the top-weighted component of the iShares Biotechnology ETF (IBB).
The iShares Biotechnology ETF (IBB) has been attracting attention as an investment to prepare for the coming economic downturn.
In this issue, we take a look at Gilead Sciences, the top-ranked component of this ETF (7.62% as of June 2022).
Looking at the chart, both performance and stock price are rather flat. Although the company is also involved in Corona-related business, this has not been a factor in the dramatic change in its performance and stock price.
Rather, we are concerned about the decline in earnings that has occurred about once every few quarters.
Therefore, we looked into the reasons for quarterly loss-making results, which have occurred three times in the past five years.
The information source is taken from the Investor page of the company’s website.
June 2020 (Q2) Net loss of $3,339 (million)
The main reason is the recording of expenses related to the acquisition.
Details below. (quoted from the company’s Web site)
Acquired IPR&D expenses increased primarily due to a $4.5 billion charge recorded in connection with Gilead’s acquisition of Forty Seven.
September 30, 2019 (Third Quarter) Net loss of $1,165 (million)
The main reason is an increase in R&D expenses
Details below. (quoted from the company’s Web site)
During the third quarter of 2019, compared to the same period in 2018:
• R&D expenses increased primarily due to up-front collaboration and licensing expenses of $3.92 billion related
to Gilead’s global research and development collaboration agreement with Galapagos.
Dec2017 (Q4) Net loss of 3,865 ($ million).
The main reason is an increase in the income tax provision
Details below. (quoted from the company’s Web site)
Provision for Income Taxes and Tax Reform Provision for income taxes was $6.0 billion for the fourth quarter of 2017 compared to $821 million for the same period in 2016 and $8.9 billion for the full year 2017 compared to $3.6 billion in 2016. The increases were primarily due to an estimated charge of $5.5 billion from Tax Reform, which was enacted on December 22, 2017 and lowers U.S. corporate income tax rates as of January 1, 2018, implements a territorial tax system and imposes a repatriation tax on deemed repatriated earnings of foreign subsidiaries. This estimate is provisional and based on our initial analysis and current interpretation. Given the complexity of the legislation, anticipated guidance from the U.S. Treasury, and the potential for additional guidance from the Securities and Exchange Commission (“SEC”) or the Financial Accounting Standards Board, this estimate may be adjusted during 2018.
To be sure, we subtracted the third quarter figures from the annual results figures for the subject balance of the income tax provision as submitted to EDGAR (*2) and calculated the fourth quarter non-consolidated income tax provision.
We were able to confirm that the figures are correct as per the company’s press release.
2017
Income tax provision $8,885 million (12 months)
Income tax provision $2,923 million (9 months)
— — — — — — — -
Income tax provision $5962 million Income tax provision (4Q stand-alone)
2016
Income tax provision $3,609 million (12 months)
Income tax provision $2,788 million (9 months)
— — — — — — — -
Income tax provision $821 million Income tax provision (4Q stand-alone)
The company also publishes Non-GAAP figures that exclude these temporary factors, so it is advisable to consider this information when making investment decisions.
Gilead Sciences「GILD」Stock Price and Quarterly EPS 15x Comparison Chart
https://www.tenq.cc/stocks/GILD
*1 Gilead Sciences Investor Relations website (quarterly results)
https://investors.gilead.com/financial-information/quarterly-earnings
*2 Gilead Sciences EDGAR Submission Data List
https://www.sec.gov/cgi-bin/browse-edgar?action=getcompany&CIK=882095&type=&dateb=&owner=exclude&count=40&search_text=
Rightmost box Specify FilingType.
Enter “10-q” for quarterly results and “10-k” for annual results, then click the Search button.
Disclaimer
・While every effort has been made to ensure the accuracy of the information contained in this page, we cannot guarantee its accuracy.
・Investments should be made at your own discretion.
