Core Insights - Zoetis raised its full-year revenue guidance by $50 million at the midpoint, now expecting revenue between $9.1 billion and $9.25 billion [1] - The company exceeded second-quarter revenue expectations but fell short on earnings per share (EPS) [1] - Shares of Zoetis surged 6% in intraday trading following the announcement [1] Financial Performance - For Q2, Zoetis reported EPS of $1.37, a decrease of 6% year-over-year, and revenue of $2.36 billion, which represents an 8% increase [2] - The U.S. market saw a 12% revenue growth, while international operational revenue grew by 10% [2] - The companion animal portfolio achieved a 12% global operational growth, and the livestock portfolio saw a 9% growth [2]

On Tuesday, Zoetis Inc ZTS stock is trading higher after the company reported better-than-expected second-quarter financial results and raised its 2024 guidance above estimates.The animal health company reported second-quarter revenue of $2.36 billion, up 8% year-over-year on reported and 11% on an operational basis, beating the consensus of $2.31 billion.“We achieved 12% revenue growth in the U.S. and 10% operational revenue growth internationally, with both our companion animal and livestock portfolios se ...

Revenue Growth - Total revenue for the three months ended June 30, 2024, increased by $181 million, or 8%, compared to the same period in 2023, with operational growth of $243 million, or 11%[81] - For the six months ended June 30, 2024, total revenue increased by $371 million, or 9%, compared to the same period in 2023, with operational growth of $482 million, or 12%[81] - Revenue for the three months ended June 30, 2024, was $2,361 million, an 8% increase from $2,180 million in the same period of 2023[82] - Revenue for the U.S. segment increased by $143 million, or 12%, in Q2 2024 compared to Q2 2023, driven by a $121 million increase in companion animal products and a $22 million increase in livestock products[106] - International segment revenue increased by $40 million, or 4%, in Q2 2024 compared to Q2 2023, with operational revenue growth of $101 million, or 10%[106] - For the six months ended June 30, 2024, U.S. revenue increased by 14% to $2,471 million compared to $2,170 million in the same period of 2023[107] - International segment revenue increased by $69 million, or 3%, in the six months ended June 30, 2024, compared to the same period in 2023[111] Operational Performance - Price growth contributed approximately 8% to the operational revenue increase for the three months ended June 30, 2024[81] - Volume growth from new products accounted for approximately 3% of the operational revenue increase for the three months ended June 30, 2024[81] - Adjusted net income for the six months ended June 30, 2024, was $1,345 million, compared to $1,259 million in the same period of 2023, reflecting a 7% increase[73] - Adjusted net income for the three months ended June 30, 2024, was $711 million, a 9% increase from $652 million in the same period in 2023[122] - U.S. segment earnings increased by $275 million, or 20%, in the six months ended June 30, 2024, compared to the same period in 2023[110] - International segment earnings increased by $3 million, or 1%, in the three months ended June 30, 2024, compared to the same period in 2023[109] Costs and Expenses - Cost of sales for the three months ended June 30, 2024, was $668 million, representing 28.3% of revenue, compared to 27.8% in the same period of 2023[84] - Selling, general and administrative (SG&A) expenses increased by $25 million, or 4%, to $581 million for the three months ended June 30, 2024[87] - Research and development (R&D) expenses rose by $25 million, or 17%, to $171 million for the three months ended June 30, 2024[91] - Cost of sales for the six months ended June 30, 2024, was $1,311 million, maintaining 28.8% of revenue, compared to 28.6% in the same period of 2023[85] - Corporate expenses increased by $123 million, or 27%, in the six months ended June 30, 2024, compared to the same period in 2023[117] Foreign Exchange Impact - Approximately 42% of the company's revenue for the six months ended June 30, 2024, was denominated in foreign currencies, impacting overall revenue due to exchange rate fluctuations[77] - Foreign exchange negatively impacted reported revenue growth by approximately 3% for both the three and six months ended June 30, 2024[81] - International segment revenue was negatively impacted by foreign exchange, decreasing revenue by $111 million, or 6%[111] - The company is facing higher foreign currency losses in the current period, which affected the overall financial performance[100] - A significant portion of the company's revenue and costs are exposed to changes in foreign exchange rates[143] Tax and Earnings Per Share - The effective tax rate for the three months ended June 30, 2024, was 20.0%, down from 23.2% in the same period of 2023[82] - The effective tax rate decreased to 20.0% in Q2 2024 from 23.2% in Q2 2023, primarily due to lower net discrete tax expenses and a more favorable jurisdictional mix of earnings[102] - The effective tax rate on adjusted pretax income was 20.1% for the three months ended June 30, 2024, compared to 21.5% for the same period in 2023[121] - GAAP reported diluted EPS for Q2 2024 was $1.37, a decrease of 6% from $1.45 in Q2 2023; non-GAAP adjusted diluted EPS increased by 11% to $1.56 from $1.41[123] - For the six months ended June 30, 2024, GAAP reported diluted EPS was $2.67, up 1% from $2.64 in the same period of 2023; non-GAAP adjusted diluted EPS rose by 8% to $2.94 from $2.71[123] Cash Flow and Financial Position - Net cash provided by operating activities for the six months ended June 30, 2024, was $1,097 million, an increase of $365 million from $732 million in 2023[129] - The company reported a net decrease in cash and cash equivalents of $(467) million for the six months ended June 30, 2024, a significant improvement from $(1,864) million in 2023[129] - Net cash used in investing activities decreased to $263 million for the six months ended June 30, 2024, compared to $296 million in the same period of 2023, mainly due to capital expenditures[131] - Net cash used in financing activities reduced to $1,287 million for the six months ended June 30, 2024, down from $2,296 million in the same period of 2023, primarily due to treasury share purchases and dividend payments[132] - Cash and cash equivalents decreased to $1,574 million as of June 30, 2024, from $2,041 million as of December 31, 2023[135] - Long-term debt remained stable at $6,563 million as of June 30, 2024, compared to $6,564 million as of December 31, 2023[135] Risks and Challenges - The company faces risks from competing products, including generic alternatives, which may impact its market position[142] - Unanticipated safety, quality, or efficacy concerns about the company's products could adversely affect performance[142] - The company is subject to fluctuations in global economic conditions, including inflation and regional conflicts[142] - Legal factors, including product liability claims and antitrust litigation, may negatively impact profitability[142] - The company is at risk of cyberattacks and information security breaches that could compromise data[142] - The company must generate sufficient cash to service its substantial indebtedness[142]

Financial Data and Key Metrics Changes - The company reported $2.4 billion in revenue for Q2 2024, growing 8% on a reported basis and 11% operationally [18] - Adjusted net income was $711 million, growing 9% on a reported basis and 18% operationally [18] - Adjusted diluted EPS grew 20% operationally for the quarter [34] Business Line Data and Key Metrics Changes - The companion animal portfolio grew 12% operationally, while the livestock portfolio saw 9% operational growth [7] - The OA pain mAbs generated $149 million in revenue, and the Simparica franchise posted $384 million [18] - The key dermatology franchise contributed $414 million, with Apoquel and Cytopoint driving strong growth [18] Market Data and Key Metrics Changes - US revenue grew 12% in the quarter, with companion animal growing 13% and livestock posting 11% growth [25] - International revenue grew 4% on a reported basis and 10% operationally, with companion animal growing 12% and livestock growing 8% [30] - The international Simparica franchise grew 35% operationally, driven by increased use in Latin America and Eastern Europe [31] Company Strategy and Development Direction - The company is focused on delivering consistent results through innovation and market expansion, with a commitment to excellence in animal health [7] - A $6 billion share repurchase program was announced, reflecting confidence in the company's growth trajectory [16][35] - The company is investing in direct-to-consumer marketing to enhance awareness and compliance among pet owners [13][21] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing growth trajectory, particularly in the OA pain franchise and key dermatology products [15][37] - The company raised its 2024 guidance, expecting revenue between $9.1 billion and $9.25 billion, representing 9% to 11% operational growth [36][37] - Management noted that while macroeconomic headwinds persist, the animal health industry remains resilient [15] Other Important Information - The company is developing a market for breakthrough products that are safer and more effective, with significant growth in the OA pain franchise [10] - The company highlighted the potential addressable market of 11 million dogs in the US that could benefit from its therapies [12] - The planned divestiture of the Medicated Feed Additives portfolio is expected to close in the second half of the year [36] Q&A Session Summary Question: Pricing and Volume Split for the Quarter - The quarter had about 8% price and 3% volume growth, with a balanced picture year-to-date [40][41] Question: DTC Spending and Returns - The company is investing significantly across various channels, with a focus on driving compliance and market growth [43][44] Question: Librela Sales Trends - Librela sales grew 142% in the quarter, with expectations for continued growth and positive reception from pet owners [47][48] Question: Competitive Positioning in Dermatology - The company raised expectations for dermatology growth to double digits, reflecting strong performance and competitive positioning [49] Question: Apoquel Chewable Contribution - Apoquel chewable is primarily contributing to conversion from traditional Apoquel, with significant long-term growth potential [56]

Core Insights - Zoetis, Inc. reported second-quarter 2024 adjusted earnings of $1.56 per share, exceeding the Zacks Consensus Estimate of $1.49 and up from $1.41 in the same quarter last year [1] - Total revenues increased by 8% year over year to $2.36 billion, surpassing the Zacks Consensus Estimate of $2.30 billion, compared to $2.18 billion in the prior year [1] Revenue Breakdown - U.S. segment revenues rose 12% year over year to $1.31 billion, exceeding both the Zacks Consensus Estimate and the model estimate of $1.26 billion [3] - Sales of companion animal products in the U.S. increased by 13% to $1.08 billion, driven by monoclonal antibody products for osteoarthritis pain and key dermatology products [3] - Livestock product sales in the U.S. grew 11% to $228 million, primarily due to higher sales of cattle and swine products [4] - International segment revenues improved by 4% year over year to $1.04 billion, beating both the Zacks Consensus Estimate and the model estimate of $1.02 billion [4] Operational Performance - Companion animal product sales in the international segment rose 7% on a reported basis and 12% operationally, driven by growth in key products [4] - Livestock product sales were flat on a reported basis but grew 8% operationally, with price increases contributing to growth in the international segment [5] Future Guidance - Zoetis raised its 2024 adjusted earnings guidance to a range of $5.78-$5.88 per share, up from the previous guidance of $5.71-$5.81 [6] - Projected revenues for 2024 are now between $9.10 billion and $9.25 billion, indicating an operational growth of 9-11% [6] Overall Assessment - The company reported better-than-expected second-quarter results, with strong sales driven by the companion animal portfolio and key dermatology products [7] - Continued revenue growth is anticipated, supported by the strength of the pet care portfolio and expansion in international markets [7]

It was a classic beat-and-raise quarter for Zoetis.Shares of Zoetis (ZTS 5.98%), the leading animal pharmaceutical maker, were climbing today after the company reported better-than-expected results in its second-quarter earnings report and raised its guidance for the full year.As a result, the stock was up 6.4% as of 10:34 a.m. ET. Zoetis gets back on trackAfter some weakness earlier this year, Zoetis posted solid results with revenue up 8% to $2.36 billion, ahead of estimates at $2.31 billion. Growth was l ...

Zoetis reported strong revenue growth and raised its guidance, though net income showed weakness.Key PointsAdjusted earnings per share topped analyst estimates.Net income fell 7% year over year to $624 million.Full-year guidance for revenue and adjusted net income was raised.Animal health specialist Zoetis (ZTS 6.70%) posted second-quarter earnings on Tuesday that topped analysts' consensus estimates on both top and bottom lines. While revenue was up 8% year over year net income fell by 7% to $624 million d ...

Zoetis (ZTS) came out with quarterly earnings of $1.56 per share, beating the Zacks Consensus Estimate of $1.49 per share. This compares to earnings of $1.41 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of 4.70%. A quarter ago, it was expected that this animal health company would post earnings of $1.34 per share when it actually produced earnings of $1.38, delivering a surprise of 2.99%.Over the last four quarters, the compan ...

2 nd Quarter 2024 Financial Results August 6, 2024 Forward-Looking Statements This presentation contains forward-looking statements, which reflect the current views of Zoetis with respect to: business plans or prospects, future operating or financial performance; future guidance, future operating models, R&D costs; timing and likelihood of success; expectations regarding products, product approvals or products under development and expected timing of product launches; disruptions in our global supply chain; ...

EXHIBIT 99.1 Zoetis Announces Second Quarter 2024 Results • Reports Revenue of $2.4 Billion, Growing 8%, and Net Income of $624 Million, or $1.37 per Diluted Share, Decreasing 7% and 6%, Respectively, on a Reported Basis for Second Quarter 2024 • Delivers 11% Operational Growth in Revenue and 18% Operational Growth in Adjusted Net Income for Second Quarter 2024 • Reports Adjusted Net Income of $711 Million, or Adjusted Diluted EPS of $1.56, for Second Quarter 2024 • Raises Full Year 2024 Revenue Guidance to ...