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Gilead Beats Estimates; Hikes Dividend

Shares of biopharma giant Gilead Sciences, Inc. (NASDAQ: GILD – $83.47) are trading nearly 4% higher after reporting adjusted earnings of $1.78 per share, down from $2.70 a year earlier, but above analysts’ views of $1.67. The California company, however, recorded charges of $5.5 billion related to U.S. tax law changes. As of Dec. 31, Gilead reported $36.7 billion in cash, but didn’t specify how much of that was held abroad. Of the $41.36 billion in cash it reported as of Sept. 30, $32.4 billion was held abroad and it appears the company will be moving much of that to the U.S. under the new tax law. Revenue for the period fell 19% to $5.95 billion, but also beat analysts’ projections of $5.74 billion. Hepatitis C product sales fell to $1.5 billion in the latest quarter, compared with $3.2 billion in the year-earlier period.

       The company provided guidance for the full-year with sales of $20 billion to $21 billion, compared with the $21.97 billion analysts had expected. While not making any estimates for earnings, Wall Street believes GILD can earn $6.70 – $6.80 per share for the year, placing a price to earnings value of 12.5, providing decent value. In addition to the earning’s release, the Board increased the dividend by 10%, resulting in a quarterly payout of $0.57 payable on March 29, 2018 to stockholders of record at the close of business on March 16, 2018 and will yield 2.7% on an annual basis. The shares, not without risk, can be held for further recovery.

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