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Gilead earnings: $3.32 per share, vs expected EPS of $3

Gilead shares pop 2% on earnings beat

Gilead reported quarterly earnings and revenue on Tuesday that beat analysts' expectations, boosted by sales of its drugs in Japan.

The pharmaceutical company posted fourth-quarter earnings per share of $3.32, compared to $2.43 a share a year earlier. Revenue came in at $8.51 billion, up from $7.31 billion.

Analysts expected Gilead to report earnings of about $3 a share on $8.14 billion in revenue, according to a consensus estimate from Thomson Reuters.

Gilead's stock initially shot up 2 percent on the news, but pared gains after the company announced it approved a $12 billion share buyback and a 10 percent increase in the quarterly dividend.

Overall product sales increased across all geographies, the company said, especially in sales of its flagship hepatitis C treatments in Japan. Sales in that country also boosted HIV and liver disease treatment sales.

Fourth-quarter sales of hepatitis C treatment Harvoni declined year over year in the U.S. to $1.7 billion from $2 billion, but increased in Europe and abroad. Sovaldi saw a similar pattern in the U.S., falling to $660 million from $1.18 billion.

The Foster City, California-based company has been under fire as the entire biotechnology sector faces scrutiny over high drug prices.

Gilead boasts a market share of more than 90 percent of all hepatitis C treatments with its two highest-grossing products, Harvoni and Sovaldi, the company said on a conference call last year. A full course of Sovaldi currently goes for $84,000, and a 12-week Harvoni treatment costs $94,500.

The Massachusetts attorney general's office is the latest to lob allegations of unfair commercial conduct at Gilead, claiming in a letter last week the costs of Gilead's two leading hepatitis C drugs "may constitute an unfair trade practice in violation of Massachusetts law."

Gilead has said it is committed to expand access to its medicines, regardless of ability to pay. The company has said it offers a "support path" for those who may have trouble paying for its therapies.

"We agree with the Attorney General about the importance of helping all HCV patients — and that the advent of safe, effective regimens means we can now consider the possibility of eradicating the disease," a Gilead spokeswoman told CNBC, adding that the company had reached out to Healey about setting up a meeting to discuss the issue.

Gilead recently named a new CEO with John Milligan tapped to succeed John Martin, who is stepping down from the post but will assume the role of executive chairman.

Shares of Gilead are down more than 20 percent over the past year.

— CNBC's Everett Rosenfeld contributed to this article.