(Adds company comment, analyst comment, financial details, updates share price)
Oct 26 (Reuters) - Gilead Sciences Inc posted better-than-expected third-quarter profit on Thursday, but shares fell after hours as use of its flagship hepatitis C drugs waned further and the company said it expects to feel the full impact of more competition in the current quarter.
Shares of Gilead, which in August paid nearly $12 billion for cancer immunotherapy company Kite Pharma, fell as much as 4 percent after hours and were last trading at $74.94.
For the quarter, the drugmaker said it earned $2.27 a share after one-time items. Wall Street analysts, on average, had forecast $2.13 a share, according to Thomson Reuters I/B/E/S.
Gilead's quarterly sales of hepatitis C drugs Sovaldi, Harvoni, Epclusa and Vosevi totaled $2.2 billion, down from $3.3 billion a year earlier, and near the $2.24 billion forecast by analysts. The company's antiviral and HIV drug sales rose to $3.6 billion from $3.5 billion.
Net income fell to $2.7 billion from $3.3 billion in the year-ago quarter.
Gilead warned earlier this year that sales of its high-priced hepatitis C drugs were declining as fewer patients were deemed eligible for treatment and competition increased from rivals like AbbVie Inc.
"New competition has further eroded Gilead's market share and net pricing," Gilead Chief Executive Officer John Milligan told investors on a conference call. "The impact ... will be more fully reflected beginning in the fourth quarter."
The company said it now expects full-year 2017 hepatitis C sales of no more than $9 billion, down from a previous high-end estimate of $9.5 billion.
If the forecast rate continues through next year, it implies full-year 2018 sales of around $5.4 billion - below the mean Wall Street forecast of $6.9 billion - but Gilead executives declined to comment on expectations for next year.
Evercore ISI analyst Umer Raffat said in a research note that it was "not clear if Gilead is just setting expectations low or if they're seeing something more."
Gilead also raised the lower end of its full-year 2017 product sales outlook to $24.5 billion from a previous estimate of $24 billion, leaving the upper end unchanged at $25.5 billion.
Overall quarterly revenue fell to $6.5 billion from $7.5 billion, while analysts had forecast $6.4 billion. Research and development costs dropped to $789 million from $1.14 billion.
Gilead said it was still working on logistics for launching sales of newly approved Yescarta, the $373,000 one-time treatment for non-Hodgkin lymphoma developed by Kite. The therapy is part of a new class known as chimeric antigen receptor T-cells (CAR-T) designed to reprogram immune system cells to attack cancer cells.
Milligan said Gilead continues to explore other acquisitions, including "bringing in technology that will enhance our ability to move CAR-T forward." (Reporting by Deena Beasley in Los Angeles; Editing by David Gregorio and Matthew Lewis)