FatCamera In my last article, I mentioned my desire to reduce (and potentially, eliminate) my exposure to bio-pharma companies. So, the fact that I’m writing a bullish piece on Zoetis Inc. (NYSE:ZTS) here might come as a surprise. But, in today’s report I’m going to discuss why I view Zoetis in a more positive light than other, better known, healthcare stocks such as Amgen (AMGN), Johnson and Johnson (JNJ), and Pfizer (PFE). Simply put, since spinning off from Pfizer, Zoetis has produced very unique com ...

FatCamera Introduction As you guys probably know, I like dividend growth investing. With dividend growth investing, you can compound your wealth in a sustainable way and if you invest in dividend growth stocks, the chances are high that you have exposure to high-quality and resilient companies. The composition of a dividend growth portfolio depends heavily on your time horizon, but if you have a lot of time on your side, it is a good idea to also buy some companies with high dividend growth rates. This brou ...

Particular financial metrics have been proven to indicate market-beating potential when analyzing stocks. Three examples are businesses with consistently growing dividend payments and a low payout ratio, steady share repurchases, and a high and rising return on invested capital. Finding companies that meet these requirements creates a "stocked pond" for us to fish in.One business swimming around in this stocked pond is animal health specialist Zoetis (ZTS 0.06%). It's achieved a total return above 500% sinc ...

PARSIPPANY, N.J.--(BUSINESS WIRE)--Zoetis Inc. (NYSE:ZTS) will participate in the Bank of America Securities 2024 Animal Health Summit on Thursday, February 29, 2024. Wetteny Joseph, Executive Vice President and Chief Financial Officer, will represent the company and respond to questions from analysts. He is scheduled to present at 11:40 a.m. ET. Investors and other interested parties will be able to access a live audio webcast of the presentation by visiting http://investor.zoetis.com/events-presentations ...

Zoetis, Inc. (ZTS) delivered fourth-quarter 2023 adjusted earnings (excluding one-time items) of $1.24 per share, which missed the Zacks Consensus Estimate of $1.33. In the year-ago quarter, the company delivered earnings of $1.15 per share.Total revenues grew 8% year over year to $2.21 billion, surpassing the Zacks Consensus Estimate of $2.19 billion in the reported quarter. Shares of Zoetis have gained 20.6% in the past year against the industry’s 2.8% decline.Image Source: Zacks Investment ResearchQuarte ...

Core Insights - Zoetis reported $2.21 billion in revenue for Q4 2023, an 8.5% year-over-year increase, with EPS of $1.24 compared to $1.15 a year ago [1] - The revenue exceeded the Zacks Consensus Estimate of $2.19 billion by 1.04%, while EPS fell short of the consensus estimate of $1.33 by 6.77% [1] Revenue Performance - U.S. revenue reached $1.21 billion, surpassing the average estimate of $1.19 billion, reflecting an 8.9% year-over-year increase [2] - Livestock revenue in the U.S. was $270 million, exceeding the estimate of $248.25 million, marking a 4.3% increase year-over-year [2] - International revenue for Companion Animals was $507 million, slightly below the estimate of $510.84 million, but still showing a 12.7% year-over-year growth [2] - Total international revenue was $982 million, above the estimate of $971.31 million, representing a 9% year-over-year increase [2] Segment Performance - Companion Animal revenue totaled $1.45 billion, slightly below the estimate of $1.47 billion, with an 11.1% year-over-year increase [2] - Livestock revenue was $745 million, exceeding the estimate of $696.05 million, reflecting a 4.9% year-over-year increase [2] - Contract Manufacturing & Human Health revenue was $20 million, below the estimate of $25.39 million, showing a significant decline of 25.9% year-over-year [2] - Poultry revenue within Livestock was $127 million, surpassing the estimate of $119.46 million, with a 10.4% year-over-year increase [2] - Companion Animal revenue from Horses was $88 million, exceeding the estimate of $55.62 million, marking an 11.4% year-over-year increase [2] - Revenue from Dogs and Cats was $1.36 billion, below the estimate of $1.44 billion, with an 11.1% year-over-year increase [2] - Swine revenue was $139 million, slightly above the estimate of $132.59 million, reflecting a 0.7% year-over-year increase [2] - Cattle revenue was $401 million, exceeding the estimate of $346.82 million, representing a 6.4% year-over-year increase [2] Stock Performance - Over the past month, Zoetis shares returned -1.1%, while the Zacks S&P 500 composite increased by 5.1% [3] - The stock currently holds a Zacks Rank 3 (Hold), indicating potential performance in line with the broader market in the near term [3]

Fourth Quarter and Full Year 2023 Financial Results Forward-looking Non-GAAP Financial Statements Information This presentation contains forward-looking statements, which reflect the current views of We use non-GAAP* financial measures, such as adjusted net income, adjusted diluted Zoetis with respect to: business plans or prospects, future operating or financial earnings per share and operational results (which exclude the impact of foreign exchange), performance, future guidance, future operating models; ...

Zoetis (ZTS) came out with quarterly earnings of $1.24 per share, missing the Zacks Consensus Estimate of $1.33 per share. This compares to earnings of $1.15 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -6.77%. A quarter ago, it was expected that this animal health company would post earnings of $1.35 per share when it actually produced earnings of $1.36, delivering a surprise of 0.74%.Over the last four quarters, the compa ...

Revenue Breakdown by Product and Region - 2023 revenue in the United States was $4,555 million, with 77% from companion animal products and 23% from livestock products[9] - Total international revenue for 2023 was $3,911 million, with 52% from companion animal products and 48% from livestock products[9] - Companion animal products represented approximately 65% of the company's total revenue for the year ended December 31, 2023[11] - Livestock products accounted for approximately 34% of the company's total revenue for the year ended December 31, 2023[11] - International operations accounted for 46% of total revenue in 2023, with emerging markets contributing 21%[16] - Revenue from companion animal products in the U.S. reached $3.529 billion in 2023, up from $3.341 billion in 2022 and $2.990 billion in 2021[266] - International companion animal revenue grew to $2.047 billion in 2023, compared to $1.862 billion in 2022 and $1.699 billion in 2021[266] - The U.S. remains the largest market, contributing $4.555 billion in revenue for 2023, up from $4.313 billion in 2022[265] - Parasiticides generated $1.947 billion in revenue in 2023, representing a significant portion of the company's product portfolio[269] - Vaccines contributed $1.771 billion to total revenue in 2023, showing steady growth from previous years[269] Product Portfolio and Innovation - The company has approximately 300 comprehensive product lines, including products for both companion animals and livestock[11] - The company launched Librela™ (bedinvetmab), the first injectable mAb therapy for monthly alleviation of osteoarthritis pain in dogs, approved in the EU in 2020 and in the U.S. in 2023[11] - The company acquired Jurox in 2022, expanding its range of companion animal and livestock products and increasing manufacturing capacity in Australia[12] - The company added AI dermatology and AI fecal for equine to the Vetscan Imagyst platform in 2023, enhancing diagnostic capabilities[12] - The company completed the acquisition of Basepaws in 2022, a petcare genetics company providing genetic tests and early health risk assessments[12] - The company's Pharmaq business is the global leader in vaccines and innovation for aquatic health products, with leading products like Alpha Ject and Alpha Flux[12] - The company completed the acquisition of PetMedix Ltd and adivo GmbH in 2023, both R&D stage animal health biopharmaceutical companies[13] - The company's product portfolio includes parasiticides, vaccines, dermatology products, anti-infectives, and animal health diagnostics[262] Financial Performance - Revenue for 2023 increased to $8.544 billion, up from $8.080 billion in 2022 and $7.776 billion in 2021[224] - Net income attributable to Zoetis Inc. for 2023 was $2.344 billion, compared to $2.114 billion in 2022 and $2.037 billion in 2021[224] - Earnings per share (diluted) for 2023 were $5.07, up from $4.49 in 2022 and $4.27 in 2021[224] - Research and development expenses increased to $614 million in 2023, compared to $539 million in 2022 and $508 million in 2021[224] - Dividends declared per common share increased to $1.557 in 2023, up from $1.350 in 2022 and $1.075 in 2021[224] - Net income before allocation to noncontrolling interests increased to $2,340 million in 2023, up from $2,111 million in 2022 and $2,034 million in 2021[226] - Comprehensive income attributable to Zoetis Inc. rose to $2,322 million in 2023, compared to $2,061 million in 2022 and $2,003 million in 2021[226] - Cash and cash equivalents decreased to $2,041 million in 2023 from $3,581 million in 2022[228] - Accounts receivable increased to $1,304 million in 2023 from $1,215 million in 2022[228] - Inventories grew to $2,564 million in 2023 from $2,345 million in 2022[228] - Total assets slightly decreased to $14,286 million in 2023 from $14,925 million in 2022[228] - Long-term debt, net of discount and issuance costs, remained stable at $6,564 million in 2023 compared to $6,552 million in 2022[228] - Retained earnings increased to $10,295 million in 2023 from $8,668 million in 2022[228] - Total equity rose to $4,991 million in 2023 from $4,403 million in 2022[228] - Treasury stock acquired in 2023 amounted to $1,102 million, with dividends declared at $716 million[230] - Net cash provided by operating activities rose to $2,353 million in 2023, compared to $1,912 million in 2022 and $2,213 million in 2021[232] - Capital expenditures increased to $732 million in 2023, up from $586 million in 2022 and $477 million in 2021[232] - Acquisitions, net of cash acquired, totaled $155 million in 2023, down from $312 million in 2022 and $14 million in 2021[232] - Cash dividends paid increased to $692 million in 2023, compared to $611 million in 2022 and $474 million in 2021[232] - Cash and cash equivalents at the end of 2023 decreased to $2,041 million, down from $3,581 million in 2022 and $3,485 million in 2021[232] Manufacturing and Supply Chain - The company has a global manufacturing network of 29 sites operated by itself[20] - The company's global manufacturing network consists of 109 CMOs as of December 31, 2023, supporting its supply chain[22] - The company owns the majority of its manufacturing sites, with 9 leased facilities and a portion of the Tullamore site in Ireland also leased[22] - A new manufacturing site was purchased outside Atlanta, Georgia in 2023, with plans for future commercial production[22] - The company operates a global manufacturing network with 29 sites across 12 countries and relies on 109 third-party CMOs[72] - Manufacturing challenges during COVID-19 impacted production of products like Simparica Trio, Librela, and Solensia, leading to purchase limits and delayed launches[72] Research and Development - The company incurred R&D expenses of $614 million in 2023, $539 million in 2022, and $508 million in 2021[19] - The company employed approximately 1,600 employees in global R&D operations as of December 31, 2023[19] - The company's R&D efforts may fail to generate new products or innovations, impacting future growth[75] - Delays in regulatory approvals or commercialization of new products could negatively affect revenue and earnings[76] - Animal testing regulations and negative publicity could impact R&D timelines and the company's reputation[77] Regulatory and Compliance - The company's regulatory compliance includes engagement with global agencies and adherence to U.S. FDA, USDA, and EPA regulations[25][26][27] - The company is subject to U.S. Foreign Corrupt Practices Act (FCPA) and foreign trade controls, including activities in Iran under OFAC regulations[27] - The company's product portfolio includes human medical devices regulated by the FDA, following the acquisition of Abaxis[26] - Regulatory scrutiny on animal health products and livestock operations is increasing, potentially requiring additional resources[48] - The company is subject to substantial global regulations, and non-compliance could result in fines, shutdowns, or product withdrawals[78] - Regulatory approvals are critical for marketing new products, and delays or failures in obtaining approvals could prevent the company from selling products in certain jurisdictions[79] - The company faces risks from economic sanctions, particularly in Russia and Iran, where it sells limited humanitarian animal health products[79] - Compliance with environmental, health, and safety laws could result in significant costs, including fines, penalties, and remediation expenses[79] - Climate change regulations, such as the EU's ESRS and California's Climate Corporate Data Accountability Act, may impose additional costs and disclosure obligations starting in 2026[79] - The company is subject to evolving chemical regulations, including restrictions on PFAS, with Maine banning products containing intentionally added PFAS by 2030[79] Competition and Market Risks - The company faces competition from major players like Boehringer Ingelheim, Merck Animal Health, Elanco, and IDEXX Laboratories, as well as generic products and startups[23] - The company faces increasing competition in the animal health industry, with potential impacts on revenue and profitability[53] - The company faces competition from generic alternatives, which may impact its market share[56] - Sales of Rimadyl chewable and Draxxin products declined by 33% and 47% respectively in the U.S. due to generic competition[57] - Global economic and political conditions, including COVID-19, Russia-Ukraine conflict, and inflation, could adversely affect the company's operating results and financial condition[58] - Consolidation of customers and distributors may lead to decreased product pricing and negatively impact financial performance[59] - Shift in distribution channels for companion animal products, particularly towards e-commerce, could reduce market share and margins[61] - Outbreaks of animal diseases like African Swine Fever and avian influenza could reduce demand for livestock products and impact sales[63] - Revenue from antibacterials for livestock was less than $950 million in 2023, with potential future declines due to regulatory restrictions and consumer preferences[64] - Adverse weather conditions and natural disasters could disrupt manufacturing and reduce demand for products[66] - Climate change may increase disease prevalence in livestock and disrupt supply chains, negatively impacting financial performance[67] - Changes in trade policies and tariffs, particularly involving the U.S. and China, could harm the company's business and financial condition[67] Intellectual Property and Patents - The company holds approximately 5,880 granted patents and 1,490 pending patent applications across more than 50 countries[24] - Key patent expirations include Draxxin (tulathromycin) in Japan and Brazil (2025), Excede/Naxcel (ceftiofur) in the U.S., Japan, and Brazil (2024-2027), and Cerenia injectable (2025-2028)[24] - The company maintains over 10,500 trademark applications and registrations globally for its animal health products[24] - The company's intellectual property rights are subject to challenges, which could allow competitors to take advantage of its research and development efforts[86] Employee and Diversity Initiatives - The company has approximately 14,100 employees worldwide, with 6,900 in the U.S. and 7,200 in other jurisdictions as of December 31, 2023[31] - The employee engagement rate was 86% in 2023, maintaining a high level in the high eighties for the last three years[32] - The company aims to increase the representation of women at the director level and above globally from 32% to 40% by the end of 2025[33] - The company aims to increase the overall representation of people of color in the U.S. from 21% to 25% by the end of 2025[33] - The company aims to increase the representation of Black colleagues in the U.S. from 4% to 5% by the end of 2025[33] - The company aims to increase the representation of Latinx colleagues in the U.S. from 5% to 6% by the end of 2025[33] - The global voluntary attrition rate decreased from 10% in 2022 to 8% in 2023[34] - The company tracks health and safety performance metrics including total injury rate (TIR) and lost time injury rate (LTIR), which are lower than industry averages[36] - The company has a leadership team with 64% of the executive team, including the CEO, being women[33] - The company offers nine Colleague Resource Groups to foster a diverse and inclusive environment[33] Environmental and Sustainability - Environmental-related capital expenditures in 2023 were approximately $15 million[48] - Other environmental-related expenditures in 2023 were approximately $19 million[48] - The company has indemnification obligations for environmental cleanups at sites it no longer owns or operates[48] - The company's future capital expenditures for environmental compliance and remediation are uncertain but not expected to have a material adverse effect[49] - Climate change regulations, such as the EU's ESRS and California's Climate Corporate Data Accountability Act, may impose additional costs and disclosure obligations starting in 2026[79] Legal and Litigation Risks - The company is subject to potential product liability claims and regulatory actions due to safety, quality, or efficacy concerns[55] - Litigation risks, including potential increases in liability for emotional distress claims related to companion animals, could materially impact financial results[80] - Counterfeit or illegally compounded versions of products, such as Apoquel and Simparica in Brazil, pose risks to the company's reputation and business[81] - Off-label use of products, such as Ketaset, could lead to increased liability and regulatory penalties[82] - Data privacy compliance is a significant challenge, with potential fines and penalties under laws like GDPR and CCPA[82] - ESG goals and disclosures, including the Driven to Care program, expose the company to reputational and operational risks[83] Financial Risks and Debt Management - The company has approximately $6.7 billion of total unsecured indebtedness outstanding as of December 31, 2023[92] - The company's high level of debt could limit its ability to obtain additional financing and increase its vulnerability to adverse economic conditions[92] - The company may face liquidity problems if cash flows and capital resources are insufficient to fund debt service obligations, potentially leading to reduced investments, asset disposals, or changes in dividend policy[93] - The company has a $1.0 billion senior unsecured revolving credit facility expiring in December 2027, with the option to increase it to $1.5 billion[292] - As of December 31, 2023, the company had $56 million in available lines of credit and $3 million in outstanding borrowings[292] - The company issued $1.35 billion in senior notes in November 2022, with $600 million due in 2025 and $750 million due in 2032[293] - Long-term debt as of December 31, 2023, totaled $6.564 billion, with a fair value of $6.319 billion[294] - Expected interest payments on long-term debt for 2024 are $272 million, with total interest payments of $3.166 billion over the life of the debt[295] - Interest expense, net of capitalized interest, was $239 million in 2023, compared to $221 million in 2022 and $224 million in 2021[296] Foreign Exchange and Interest Rate Risks - 43% of the company's revenue in 2023 was generated in currencies other than the U.S. dollar, primarily the euro, Brazilian real, Australian dollar, Chinese renminbi, British pound, and Canadian dollar[84] - The company faces risks from currency devaluations and cash repatriation restrictions, particularly in countries like China[84] - A 10% change in the U.S. dollar against other currencies would result in an $82 million change in cumulative translation adjustment (CTA) related to net investment hedges[202] - A 10% change in the U.S. dollar against other currencies would impact the fair value of foreign currency forward-exchange contracts by $11 million[202] - A 100-basis point increase in SOFR-based interest rates would increase annual interest expense by approximately $3 million due to fixed to floating interest rate swap agreements[203] - A 100-basis point increase or decrease in SOFR-based interest rates would change the fair value of forward-starting interest rate swaps by $6 million or $(7) million, respectively[203] - The company's primary net foreign currency translation exposures include the Australian dollar, Brazilian real, British pound, Canadian dollar, Chinese renminbi, and euro[202] - The company's debt is predominantly fixed-rate, with interest rate risk managed through interest rate swap agreements and forward-starting interest rate swaps[203] - The company's foreign exchange risk is managed through operational means and financial instruments, including foreign exchange derivative instruments and forward-exchange contracts[202] - The company uses derivative financial instruments to manage foreign exchange risk, primarily in the Australian dollar, British pound, Canadian dollar, Chinese renminbi, euro, and Norwegian krone[297] - Foreign currency forward-exchange contracts used for hedging typically mature within 60 days, with some extending up to 4 years[298] - The company entered into forward-starting interest rate swaps with an aggregate notional value of $650 million from 2019 to 2022 to hedge against interest rate exposure related to the issuance of fixed-rate debt[299] - Upon issuance of the 2022 senior notes, the company terminated these contracts and received $114 million in cash from the counterparties for settlement[299] - As of December 31, 2023, the company had outstanding forward-starting interest rate swaps with an effective date and mandatory termination date in March 2026 to hedge against interest rate exposure related to the anticipated future issuance of fixed-rate debt[299] - The aggregate notional amount of foreign currency forward-exchange contracts as of December 31, 2023, was $1,948 million, up from $1,753 million in 2022[300] - The fair value of forward-starting interest rate swap contracts as of December 31, 2023, was $12 million, compared to $10 million in 2022[301] - The company had $13 million of collateral received and $33 million posted related to derivative instruments as of December 31, 2023[301] - Net losses on foreign currency forward-exchange contracts not designated as hedging instruments were $25 million in 2023, down from $58 million in 2022[301] - The unrecognized net losses on foreign exchange derivative instruments, recorded net of tax in Accumulated other comprehensive loss, were $23 million in 2023, compared to a gain of $36 million in 2022[302] Tax and Accounting - The company recorded gross unrecognized tax benefits of $209 million as of December 31, 2023[211] - Rebate accruals for the U.S. segment included $301 million

In its upcoming report, Zoetis (ZTS) is predicted by Wall Street analysts to post quarterly earnings of $1.33 per share, reflecting an increase of 15.7% compared to the same period last year. Revenues are forecasted to be $2.19 billion, representing a year-over-year increase of 7.4%.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted downward by 1.6% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this ...