Gilead Sciences (GILD 3.18%) disappointed investors when it announced 2018 fourth-quarter earnings in February. The big biotech badly missed the consensus analysts' earnings estimate.

On Thursday, Gilead reports its latest quarterly results after the market closes. Here are three things you can expect in the biotech's Q1 earnings update.

Two people in lab coats looking at a computer monitor.

Image source: Getty Images.

1. Declining revenue yet again

Investors have become accustomed to Gilead posting lower year-over-year revenue. The consensus analysts' estimate calls for the company to report a 4.5% year-over-year revenue increase in Q1. Don't count on that growth, though.

Gilead CFO Robin Washington said in the company's Q4 conference call that first-quarter product sales "will decline sequentially by a percentage similar to what we've seen over the past two years, which was in the range of 12% to 14%." She added that this decline would be primarily driven by seasonal inventory and buying patterns.

A sequential decline at the midpoint of Washington's range translates to product sales of around $4.9 billion. Adding royalties, contract, and other revenue should bump up Gilead's total revenue to close to $5.05 billion -- a little below the prior-year period revenue of $5.09 billion.

2. A mix of good news and bad news

Within Gilead's total revenue, though, there is likely to be both good news and bad news. Let's start with the worst of the bad news: The biotech's hepatitis C virus (HCV) franchise will continue to struggle.

This isn't a surprise since declining HCV sales have plagued Gilead for several years now. There are fewer patients available for treatment after powerful HCV drugs from Gilead and other companies have cured so many individuals with hepatitis C. Gilead also has a formidable competitor in AbbVie. In addition, Gilead will feel the sting of a step-down in Medicare pricing for its HCV drugs in the first quarter.

Gilead also faces stiff competition from generic HIV drugs in Europe. The company reported lower European HIV revenue in the fourth quarter and is likely to have similar news in Q1.

However, the good news for Gilead is that its U.S. HIV business should continue to be very strong. Biktarvy is picking up great momentum. Gilead's other Descovy-based HIV drugs are also performing very well, a trend that's likely to continue in the first quarter.

3. A potential boost to full-year 2019 earnings guidance

You might not have high hopes for Gilead improving its full-year outlook with the prospects of total revenue slipping in the first quarter. However, don't be surprised if the company actually boosts its full-year 2019 earnings guidance.

Washington noted in her Q4 conference call comments that Gilead tends to set guidance at the beginning of the year that reflects "all the uncertainties" that could be expected to impact its business, including currency fluctuations. But as these uncertainties become known factors, Gilead could tweak its guidance.

There's also a not-so-good reason why Gilead could increase its full-year earnings guidance. Selonsertib failed to meet the primary endpoints in two late-stage studies targeting nonalcoholic steatohepatitis (NASH). Gilead had included higher spending in anticipation of launching the drug later this year. That launch won't happen now, so the company's operational expenses could be lower than expected, thereby boosting its earnings this year. Of course, Gilead would have much preferred that selonsertib had succeeded in the late-stage studies.

A new O'Day for Gilead

Investors will also want to listen closely for any hints of a potential change in direction for Gilead. The company's new CEO, Daniel O'Day, will participate in his first quarterly update at the helm of Gilead Sciences. O'Day's background with Roche might mean that Gilead will shift more toward oncology.

On the other hand, with the huge potential of the NASH market combined with the failures for selonsertib, O'Day could lead Gilead to make strategic acquisitions on that front. He will certainly have enough money to pull off some deals. Gilead ended 2018 with a cash stockpile of $31.5 billion. And its cash position might look even better when the company announces its Q1 results.