Zoetis(ZTS)2025-05-06 11:03Financial Performance - Zoetis reported revenue of $2.2 billion for Q1 2025, a 1% increase compared to Q1 2024, with 9% organic operational growth [3]. - Net income for Q1 2025 was $631 million, or $1.41 per diluted share, reflecting increases of 5% and 8% respectively on a reported basis [4]. - Adjusted net income for Q1 2025 was $662 million, or $1.48 per diluted share, marking a 4% increase on a reported basis and 6% on an organic operational basis [4]. - Total revenue for the three months ended March 31, 2025, was $2,220 million, a 1% increase compared to $2,190 million in 2024 [36]. - The company reported total earnings of $810 million, an 8% increase from $747 million in the prior year [42]. Segment Performance - The U.S. segment revenue was $1.2 billion, up 2% year-over-year, with companion animal product sales increasing by 8% [6]. - The International segment revenue was $1.0 billion, flat on a reported basis but up 11% on an organic operational basis [6]. - Companion Animal revenue increased by 7% to $1,546 million, while Livestock revenue decreased by 10% to $645 million [36]. - U.S. total revenue rose by 2% to $1,183 million, with Companion Animal revenue up 8% and Livestock revenue down 21% [36]. - International earnings increased by 3% to $551 million, with a gross margin of 70.0% [42]. Guidance and Projections - Zoetis updated its full year 2025 revenue guidance to between $9.425 billion and $9.575 billion, maintaining organic operational growth guidance of 6% to 8% [4]. - Adjusted diluted EPS guidance for 2025 is updated to between $6.20 and $6.30, reflecting the impact of foreign exchange and enacted tariffs [4]. - Adjusted net income guidance for 2025 is updated to between $2.775 billion and $2.825 billion, reflecting organic operational growth of 5% to 7% [10]. - The company expects full-year 2025 revenue guidance of $9,425 to $9,575 million, an increase from the prior guidance of $9,225 to $9,375 million [31]. - Adjusted net income for 2025 is projected to be between $2,775 to $2,825 million, up from the previous estimate of $2,700 to $2,750 million [31]. Cost and Expenses - Adjusted cost of sales decreased by 3% to $620 million in Q1 2025, compared to $642 million in Q1 2024, with adjusted cost of sales as a percentage of revenue at 27.9% [28]. - The cost of sales in the U.S. decreased by 8% to $199 million, contributing to improved gross profit [42]. - Adjusted SG&A expenses for 2025 are projected to be between $2,340 to $2,390 million, an increase from the previous range of $2,300 to $2,350 million [31]. - Research and development expenses for 2025 are expected to be between $690 to $700 million, up from the prior estimate of $680 to $690 million [31]. Product Development and Approvals - The company received new product approvals, including Simparica Trio for flea tapeworm prevention in the U.S. and additional claims for Revolution Plus in the U.K. [7]. - Livestock product sales declined 21% in Q1 2025, primarily due to the divestiture of the medicated feed additive product portfolio [6]. - The company experienced a 45% increase in revenue from the Human Health segment, rising to $29 million [36]. Tax and Significant Items - The effective tax rate on adjusted income is anticipated to be approximately 21% for 2025, unchanged from previous guidance [31]. - Certain significant items and acquisition-related costs for 2025 are estimated at approximately $45 million, up from the previous estimate of $30 million [31].