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ZTS Q2 Earnings & Revenues Beat Estimates, '25 Outlook Raised
ZACKSยท 2025-08-05 17:26
Core Insights - Zoetis, Inc. (ZTS) reported second-quarter 2025 adjusted earnings of $1.76 per share, exceeding the Zacks Consensus Estimate of $1.62 and up from $1.56 in the same quarter last year [1] - Total revenues for the quarter reached $2.46 billion, a 4% year-over-year increase, surpassing the Zacks Consensus Estimate of $2.40 billion and the previous year's revenue of $2.36 billion [1] Revenue Breakdown - The U.S. segment revenues increased by 4% year over year to $1.36 billion, beating both the Zacks Consensus Estimate of $1.33 billion and the model estimate of $1.31 billion [2] - Sales of companion animal products in the U.S. rose by 9% to $1.18 billion, driven by products like Simparica Trio and key dermatology items, although this was partially offset by a decline in monoclonal antibody sales for osteoarthritis pain [3] - International segment revenues grew by 3% year over year to $1.07 billion, exceeding the Zacks Consensus Estimate of $1.05 billion [7] - Ex-U.S. sales of companion animal products increased by 8% to $612 million, supported by growth in various key products [8] - Livestock product sales in the U.S. decreased by 21% to $180 million, primarily due to the divestiture of the medicated feed additive product portfolio [5] Future Guidance - Zoetis raised its 2025 adjusted earnings outlook to a range of $6.30-$6.40 per share, up from the previous range of $6.20-$6.30 [10] - Revenue guidance for 2025 was also increased to $9.45-$9.6 billion from the earlier range of $9.425 billion to $9.575 billion [10]
Zoetis(ZTS) - 2025 Q2 - Earnings Call Transcript
2025-08-05 13:32
Financial Data and Key Metrics Changes - The company reported $2.5 billion in revenue, growing 4% on a reported basis and 8% on an organic operational basis, excluding foreign exchange and the MFA divestiture [21] - Adjusted net income of $783 million grew 10% on both a reported and organic operational basis [21] - Organic operational revenue growth was balanced, driven by 4% price and 4% volume [21] Business Line Data and Key Metrics Changes - The companion animal portfolio generated $1.8 billion in revenue, growing 8% operationally [22] - The Simparica franchise contributed $448 million, growing 17%, while the key dermatology franchise posted $460 million, growing 11% [22] - The livestock segment achieved 6% organic operational revenue growth, driven by strong international performance [18][22] Market Data and Key Metrics Changes - The U.S. market grew 4% on a reported basis and 7% on an organic operational basis, with companion animal growing 9% and livestock declining 2% [23] - International revenue grew 3% on a reported basis and 9% on an organic operational basis, with companion animal growing 8% and livestock growing 10% [28] Company Strategy and Development Direction - The company is raising its full-year guidance for organic operational revenue growth to 6.5% to 8% based on strong first-half performance [19] - The focus remains on executing with discipline, advancing meaningful innovation, and staying connected to customer needs [20] - The company aims to leverage its leadership position in the market and continue to drive growth through innovation and differentiated products [17][20] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the animal health sector, citing strong fundamentals and a diversified portfolio [20] - The company is focused on addressing competitive pressures and macroeconomic challenges while maintaining above-market growth [38] - Management highlighted the importance of compliance and education in driving adoption of new products like Librela [51][70] Other Important Information - The company is actively advancing its pipeline, with expectations for major market approvals every year for the next few years [71] - The adjusted gross margin was reported at 73.7%, with a favorable impact from foreign exchange [34] - The company continues to manage costs effectively while investing in long-term growth [61] Q&A Session Summary Question: Changes in strategy regarding competition in the Trioderm franchises - Management noted that they have not changed their strategy and continue to see strong growth in the Simparica franchise despite competition [45][46] Question: Expectations for Librela's growth and timing - Management is focused on medical education and third-party studies to support Librela's adoption, with expectations for growth potentially starting in 2026 [51][70] Question: Ability to achieve high single-digit operational growth next year - Management emphasized the broad-based results and innovation driving growth, with confidence in achieving above-market growth [58][60] Question: Strategies to promote Cytopoint in dermatology - Management highlighted the differentiated benefits of Cytopoint and the ongoing investment in all three dermatology products [78][79] Question: Clarification on contract manufacturing for human health - Management indicated that the increase in contract manufacturing is relatively small and not expected to be a recurring significant factor [83]
Zoetis(ZTS) - 2025 Q2 - Earnings Call Transcript
2025-08-05 13:30
Financial Data and Key Metrics Changes - The company reported $2.5 billion in revenue for Q2 2025, growing 4% on a reported basis and 8% on an organic operational basis, excluding foreign exchange impacts and the MFA divestiture [19][20] - Adjusted net income reached $783 million, growing 10% on both a reported and organic operational basis [19][20] - Organic operational revenue growth was balanced, driven by 4% price and 4% volume [19] Business Line Data and Key Metrics Changes - The companion animal portfolio generated $1.8 billion in revenue, growing 8% operationally [20] - The Simparica franchise contributed $448 million, growing 17%, while the key dermatology franchise posted $460 million, growing 11% [20][21] - Livestock revenue declined 2% on an organic operational basis, primarily due to timing of supply [21][27] Market Data and Key Metrics Changes - The U.S. segment grew 4% on a reported basis and 7% on an organic operational basis, with companion animal growing 9% and livestock declining 2% [21][27] - International revenue grew 3% on a reported basis and 9% on an organic operational basis, with companion animal growing 8% and livestock growing 10% [27][31] Company Strategy and Development Direction - The company is focused on innovation and customer engagement, with a strong emphasis on expanding its portfolio and addressing unmet needs in animal health [15][19] - The company raised its full-year guidance for organic operational revenue growth to 6.5% to 8% based on strong first-half performance [17][18] - The strategy includes leveraging first-mover advantages in the parasiticides market and expanding into new therapeutic areas such as renal and oncology [72] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term growth potential of the animal health sector, citing strong fundamentals and a diversified portfolio [18][19] - The company is navigating challenges such as tariffs and competitive pressures while maintaining above-market growth [38][39] - Management highlighted the importance of compliance and education in driving adoption of new products like Librela [51][70] Other Important Information - The company reported adjusted gross margins of 73.7%, with a favorable impact from foreign exchange and improved pricing [32] - Adjusted operating expenses increased by 5% operationally, driven by higher advertising and promotion spending [33] Q&A Session Summary Question: Changes in strategy regarding competition in Trioderm franchises - Management noted that they have not changed their strategy and continue to see strong growth in the Simparica franchise despite competition [45][47] Question: Expectations for Librela's growth - Management is focused on medical education and third-party studies to support Librela's adoption, with expectations for growth potentially returning in 2026 [52][70] Question: Strategies to maintain market share in dermatology - Management emphasized the differentiation of their products and the ongoing investment in their pipeline to support growth in the dermatology franchise [77][80] Question: Impact of tariffs on animal health - Management indicated that the tariff environment remains dynamic but expressed confidence in the resilience of the animal health sector [102][104]
Zoetis Gears Up to Report Q2 Earnings: Here's What to Expect
ZACKSยท 2025-08-01 16:26
Core Viewpoint - Zoetis, Inc. (ZTS) is anticipated to exceed expectations in its second-quarter 2025 earnings report, with projected revenues of $2.4 billion and earnings of $1.61 per share [1][5]. Revenue Sources - The company generates most of its revenue from a diverse portfolio of veterinary medicines and vaccines for livestock and companion animals, with additional income from non-pharmaceutical categories such as nutritional products and precision animal health services [2]. Geographical Performance - Revenues from the United States segment are expected to rise, driven by increased sales of companion animal products, with estimates at $1.33 billion [3]. - The International segment is also projected to see revenue growth, with estimates around $1.05 billion, attributed to higher sales of companion animal products [4]. Product Performance - Strong demand for products like Simparica Trio, Librela, and Apoquel is likely to boost sales in the companion animal segment, while livestock product revenues may decline due to divestitures [5][6]. - Key products contributing to growth include monoclonal antibodies for osteoarthritis pain and flea, tick, and heartworm combination products [6]. Regulatory Approvals - The FDA's recent approval of Simparica Trio for preventing flea tapeworm infections is expected to enhance sales further [8]. Historical Performance - Zoetis has a strong earnings surprise history, surpassing estimates in the last four quarters with an average surprise of 5.21% [12]. Earnings Prediction - The company has an Earnings ESP of +0.42%, indicating a likelihood of beating the consensus estimate of $1.61 per share [14].
Zoetis Stock Rises 13% in a Month: Time to Add to Your Portfolio?
ZACKSยท 2025-06-05 18:05
Core Insights - Zoetis (ZTS) has seen a 12.5% increase in share price over the past month, indicating strong market performance in the animal health sector [1] - The company operates across seven major product categories and serves eight core species, including both livestock and companion animals [1] Product Performance - Strong growth is attributed to Zoetis' companion animal portfolio, with key products like Apoquel, Cytopoint, and newer offerings such as Simparica and ProHeart 12 driving sales [3] - Recent FDA approvals for Apoquel Chewable and expanded indications for Simparica Trio are expected to enhance demand further [3] International Expansion - Zoetis is expanding its international presence, with products like Rimadyl approved in China and strong uptake of monoclonal antibody therapies for osteoarthritis pain in pets [4] Strategic Acquisitions - The company has been actively acquiring businesses to strengthen its market position, including the acquisition of PetMedix Ltd. and adivo GmbH, which focus on antibody-based therapeutics for companion animals [6] Technological Advancements - In early 2024, Zoetis enhanced its Vetscan Imagyst diagnostics platform with AI capabilities for urine testing and lymph node screening, improving in-clinic diagnostic capabilities [7] Shareholder Value - Zoetis has consistently increased dividends, with a 16% increase in the third quarter of 2025 compared to 2024, making it an attractive option for investors [8] Stock Performance and Valuation - Year-to-date, Zoetis shares have gained 3.5%, underperforming the industry average of 10.4%, but still outperforming the sector and S&P 500 [9] - The stock is currently trading at a premium valuation compared to the industry, but strong fundamentals suggest potential for lucrative returns [12] Earnings Estimates - The Zacks Consensus Estimate for Zoetis' 2025 earnings per share has risen from $6.08 to $6.26, with 2026 estimates increasing from $6.65 to $6.79, indicating a positive outlook for growth [15]
Zoetis (ZTS) FY Conference Transcript
2025-05-22 12:00
Summary of Zoetis (ZTS) FY Conference Call - May 22, 2025 Company Overview - **Company**: Zoetis (ZTS) - **Industry**: Animal Health Key Points and Arguments Tariffs and Guidance - The company updated its guidance to reflect the impact of tariffs primarily affecting imports of APIs for livestock products from China, revising adjusted net income growth from 6%-8% to 5%-7% while maintaining organic operational revenue growth at 6%-8% [3][5][6] - The situation regarding tariffs remains fluid, and the company has several mitigation strategies available, including inventory management and dual sourcing [6][9][10] Lobbying Efforts - Zoetis is actively lobbying for an animal health exception from potential pharmaceutical tariffs, emphasizing its leadership role in the industry and the importance of U.S. manufacturing [11][12][13] - The company manufactures 75% of its U.S. sales domestically and is a net exporter, which strengthens its position in lobbying efforts [13][15] Librela Product Update - The company does not expect sequential growth for Librela in the U.S. but remains confident in year-over-year growth due to the large unmet market opportunity [16][17][18] - There are 27 million dogs in the U.S. with osteoarthritis (OA), but only 9 million are currently treated, indicating significant growth potential for Librela [19][20] - The company is focusing on educating veterinarians and pet owners to drive adoption and is leveraging post-launch studies to support its marketing efforts [20][22] R&D and Innovation Strategy - Zoetis maintains a balanced R&D strategy, with approximately 50% of spending on life cycle innovation and the other half on new innovations [48][52] - The company is excited about its pipeline, particularly in addressing unmet needs in companion animal health, such as chronic kidney disease (CKD) [59][60] Competitive Landscape - Zoetis is aware of potential competition in monoclonal antibodies but believes its established manufacturing capabilities and product pipeline provide a competitive advantage [61][62][64] - The company has a strong track record with its existing products, such as Apoquel, which has high satisfaction levels among veterinarians and pet owners [68] Financial Performance and Growth - The company aims to grow revenues faster than the industry average and has consistently achieved this, with operational growth rates above 10% in recent years [78][79] - Gross margins remain above 70%, and the company is focused on leveraging its operational efficiencies to drive bottom-line growth [79][80] Market Diversification - Zoetis emphasizes geographic and species diversification, with the U.S. accounting for 55% of its business and no other market exceeding 5% [87][88] - The company expects growth in alternative channels outside of veterinary clinics, which currently account for 21% of U.S. companion animal revenues [89][90] Additional Important Insights - The company is cautious about the timing of implementing mitigation strategies related to tariffs, ensuring that actions are taken only when necessary [6][10] - The feedback from veterinarians regarding label changes for Librela has been positive, aligning with labels in other markets [25][26] - The company is committed to lifecycle management for its products, ensuring continued innovation and market leadership [70][72]
Zoetis Q1 Earnings & Revenues Beat Estimates, '25 Outlook Raised
ZACKSยท 2025-05-06 16:11
Core Viewpoint - Zoetis, Inc. reported strong first-quarter 2025 results with adjusted earnings of $1.48 per share, exceeding expectations and showing year-over-year growth [1][2] Financial Performance - Total revenues increased by 1% year over year to $2.22 billion, surpassing the Zacks Consensus Estimate of $2.19 billion [2] - U.S. segment revenues rose by 2% to $1.183 billion, although it fell short of the consensus estimate [3] - International segment revenues remained flat year over year but increased by 7% on an operational basis to $1.008 billion, beating estimates [7] Product Performance - Sales of companion animal products in the U.S. surged by 8% to $973 million, driven by monoclonal antibody products and dermatology portfolio [4] - Livestock product sales in the U.S. declined by 21% to $210 million, primarily due to the divestiture of the medicated feed additive portfolio [5] - Ex-U.S. sales of companion animal products rose by 4% to $573 million, with significant contributions from OA pain products and dermatology products [8] Guidance Update - Zoetis raised its 2025 guidance for adjusted earnings to a range of $6.20-$6.30 per share and revenue projection to $9.425 billion to $9.575 billion [13]
Zoetis Gears Up to Report Q1 Earnings: Here's What to Expect
ZACKSยท 2025-04-28 14:05
Core Viewpoint - Zoetis, Inc. is expected to report its first-quarter 2025 earnings on May 6, 2025, with revenue estimates at $2.19 billion and earnings at $1.40 per share [1]. Group 1: Revenue Sources - The company generates most of its revenues from a diversified portfolio of veterinary medicines and vaccines for livestock and companion animals, with additional revenues from non-pharmaceutical categories like nutritional products and precision animal health services [2]. - In the United States segment, revenues are projected to increase to $1.19 billion, driven by rising sales of companion animal products, with model estimates at $1.17 billion [3]. - The International segment is also expected to see revenue growth, estimated at $0.99 billion, with model estimates at $1.01 billion, primarily due to higher sales of companion animal products [4]. Group 2: Product Performance - Sales of companion animal products, particularly monoclonal antibodies for osteoarthritis pain (Librela for dogs and Solensia for cats), and the flea, tick, and heartworm combination product Simparica Trio, are anticipated to drive revenue growth in both segments [5]. - The FDA recently approved a new indication for Simparica Trio, enhancing its market position as the only canine combination parasiticide indicated to prevent flea tapeworm infections, which is expected to boost future sales [7]. - Livestock product sales in the U.S. are expected to decline due to the divestiture of certain product lines, while international livestock sales are projected to rise, driven by price increases in cattle and poultry portfolios [8]. Group 3: Earnings Surprise History - Zoetis has a strong earnings surprise history, surpassing estimates in the last four quarters with an average surprise of 4.53%, including a 2.19% surprise in the last reported quarter [10]. - The current Earnings ESP for Zoetis is -1.15%, indicating that the most accurate estimate of $1.38 per share is lower than the consensus estimate of $1.40 per share [12].