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Gilead Sciences Inc.'s (GILD) second-quarter profit climbed 31% on strong sales of its core HIV treatment franchise, but its disappointing revenue outlook sent shares lower.

The Foster City, Calif. company, known for dominating the HIV market, said sales of top-selling Atripla and Truvada were driven by strong volume in the U.S. and Europe. But Gilead warned that sales of the drugs could face some pressure in the second half of the year, after wholesalers stocked up during the quarter to get ahead of price increases.

"Our antiviral franchise continued its momentum in gaining share across all our commercial markets," Chairman and Chief Executive John Martin said on a conference call Tuesday.

Gilead shares recently dropped 4.4% to $46.41.

For the three months ended June 30, Gilead reported net income of $571.4 million, or 61 cents a share, up from $434.8 million, or 45 cents a share, a year earlier.

Excluding items, earnings rose to 69 cents a share, beating a Wall Street projection of 61 cents a share, according to Thomson Reuters.

Revenue rose 29% to $1.65 billion, also beating expectations of $1.6 billion.

Looking forward, Gilead raised its projection for 2009 net product revenue of $6.1 billion to $6.2 billion from a previous range of $5.9 billion to $6 billion.

The anticipated outlook was the first provided by Gilead since closing its $1.4 billion purchase of CV Therapeutics Inc. in April.

Wall Street currently projects total revenue for the quarter of $6.51 billion, which includes revenue from royalties, contracts and other sources, according to Thomson Reuters.

Gilead warned that both Atripla and Truvada could face pressure in the second half of the year as wholesalers decrease inventories.

Those levels rose during the quarter despite consistent retail demand, as wholesalers bought more product ahead of a July 1 price increase on the drugs.

Second-quarter sales of Truvada, which includes two Gilead drugs, rose 18% to $608.1 million, beating a Wall Street consensus estimate of $601 million, according to Citigroup.

Atripla, a triple treatment that consists of Truvada along with Bristol-Myers Squibb Co.'s (BMY) Sustiva, saw sales rise 60% to $569.1M, also beating Wall Street views of $547 million.

On the call, Gilead noted that the drug was launched in France during the quarter, which it called the largest HIV market in the European Union.

The company recorded sales of Ranexa, an angina treatment, of $36.1 million since mid-April, when it closed the CV Therapeutics deal.

In the conference call, the company said that it has closed a Colorado facility acquired in the deal and has identified "significant opportunities" in cost cuts that will offset the sales and marketing investment it plans to make in Ranexa.

Gilead noted that it expects to record restructuring expenses related to deal through 2010.

-By Thomas Gryta, Dow Jones Newswires; 212-416-2169; thomas.gryta@dowjones.com