Zoetis(US:ZTS)2024-11-04 18:52Financial Performance - Total revenue for the three months ended September 30, 2024, increased by $237 million, or 11%, compared to the same period in 2023, with operational growth of 14%[78] - Net income attributable to Zoetis for the three months ended September 30, 2024, was $682 million, a 14% increase from $596 million in the same period of 2023[69] - For the nine months ended September 30, 2024, total revenue increased by $608 million, or 10%, with operational growth of 12% compared to the same period in 2023[70] - Adjusted net income for the nine months ended September 30, 2024, was $2,061 million, reflecting a 9% increase from $1,888 million in the same period of 2023[70] - Total revenue for the company reached $2,388 million in Q3 2024, an 11% increase from $2,151 million in Q3 2023[99] - Total earnings for the company increased by 22% to $874 million in Q3 2024, up from $717 million in Q3 2023[102] - GAAP reported net income attributable to Zoetis for the nine months ended September 30, 2024, was $1.905 billion, a 5% increase from $1.819 billion in the prior year[115] - Diluted earnings per share (EPS) for the nine months ended September 30, 2024, was $4.18, a 6% increase from $3.93 in the prior year[116] Revenue Growth Drivers - Price growth contributed approximately 7% to operational revenue growth for the nine months ended September 30, 2024[78] - U.S. segment revenue increased by $172 million, or 15%, to $1,346 million in Q3 2024, driven by an $160 million increase in companion animal products and a $12 million increase in livestock products[100] - International segment revenue rose by $65 million, or 7%, to $1,021 million in Q3 2024, with operational revenue growth of $125 million, or 13%[100] - Companion animal revenue in the U.S. grew primarily due to sales of mAb products for osteoarthritis pain, including Librela and Solensia, as well as key dermatology products[103] - Livestock revenue growth in the U.S. was attributed to increased sales of cattle and swine products, benefiting from supply availability compared to the prior year[103] - U.S. segment revenue increased by $473 million, or 14%, to $3.8 billion for the nine months ended September 30, 2024, driven by companion animal products growth[105] - International segment revenue rose by $134 million, or 5%, to $2.8 billion for the nine months ended September 30, 2024, with operational revenue growth of $305 million, or 10%[106] Expenses and Costs - Selling, general and administrative (SG&A) expenses increased by $40 million, or 8%, to $565 million for the three months ended September 30, 2024, compared to $525 million in 2023[83] - Research and development expenses for the three months ended September 30, 2024, were $167 million, a 10% increase from $152 million in the same period of 2023[79] - R&D expenses for the nine months ended September 30, 2024, increased by $60 million, or 14%, totaling $500 million compared to $440 million in 2023[86] - SG&A expenses for the nine months ended September 30, 2024, rose by $107 million, or 7%, to $1,693 million from $1,586 million in 2023[83] - The provision for taxes on income increased to $182 million for the three months ended September 30, 2024, compared to $121 million in 2023, with an effective tax rate of 20.8%[96] - The effective tax rate for the three months ended September 30, 2024, was 20.8%, compared to 16.9% in the same period of 2023[79] Cash Flow and Financial Position - The net cash provided by operating activities for the nine months ended September 30, 2024, was $2,048 million, an increase of $592 million compared to $1,456 million in 2023[125] - The net decrease in cash and cash equivalents for the nine months ended September 30, 2024, was $327 million, a significant improvement from a decrease of $1,827 million in 2023[125] - Cash and cash equivalents as of September 30, 2024, were $1,714 million, a decrease from $2,041 million as of December 31, 2023[130] - Accounts receivable increased to $1,411 million as of September 30, 2024, from $1,304 million at the end of 2023[130] - The ratio of current assets to current liabilities improved to 3.69:1 as of September 30, 2024, compared to 3.36:1 at the end of 2023[130] Risk Factors - The company is subject to various risks including legal proceedings, economic conditions, and competition from generic products[138] - Future performance is uncertain and may be affected by factors such as product launch delays and regulatory changes[138] - The company emphasizes the importance of protecting intellectual property rights amid potential legal disputes[138] - Risks related to climate change and natural disasters could impact the company's operations and supply chain[138] - The company acknowledges the potential for cyberattacks and data breaches as a significant risk[138] Strategic Outlook - The company anticipates continued growth driven by new product launches and expansion into emerging markets such as Brazil, China, and Mexico[68] - There is a focus on the integration of acquired businesses and the successful commercialization of new products[138]