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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 (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(ZTS) - 2025 FY - Earnings Call Transcript
2025-05-21 13:00
Financial Data and Key Metrics Changes - In 2024, the company achieved 11% operational revenue growth and a 15% increase in adjusted net income operationally, indicating strong financial performance [22][23]. Business Line Data and Key Metrics Changes - The innovative companion animal portfolio grew 14% operationally, with all key franchises delivering double-digit growth [23]. - The livestock portfolio also grew 5% operationally, surpassing the historic industry average [26]. Market Data and Key Metrics Changes - The dermatology franchise has helped over 25 million dogs and is projected to reach a market size of $2.5 billion by 2028, showcasing significant market potential [24]. Company Strategy and Development Direction - The company continues to focus on an omnichannel strategy, enhancing customer access through clinics, retail, and home delivery [23]. - There is an emphasis on integrating advanced technologies like generative AI into R&D processes to accelerate discovery and optimize development timelines [25]. - The strategic divestiture of certain product portfolios aligns with the focus on high-growth opportunities [26]. Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength of the portfolio and the ability to adapt to market changes, highlighting a long runway of opportunity ahead [27][28]. - The company remains committed to delivering meaningful outcomes for animals and their caretakers, reinforcing its purpose-driven approach [28]. Other Important Information - The company received conditional licensure for an avian flu vaccine for chickens, positioning it to support customers in addressing evolving threats [25]. Q&A Session Summary Question: How does the compensation committee use the compensation actually paid total compensation figures in its calculation of the CEO target total compensation award for the upcoming year? - The board considers competitive practices and performance, with 92% of the CEO's compensation based on performance incentives, both short-term and long-term [31][32].
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(ZTS) - 2025 Q1 - Earnings Call Transcript
2025-05-06 12:30
Financial Data and Key Metrics Changes - The company reported $2.2 billion in revenue, growing 1% on a reported basis and 9% on an organic operational basis, driven by 4% price and 5% volume [22][24][36] - Adjusted net income was $662 million, growing 4% on a reported basis and 6% on an organic operational basis [22][36] - Adjusted diluted EPS grew 4% operationally and 8% on an organic operational basis, reflecting a lower share count due to ongoing share buybacks [33][36] Business Line Data and Key Metrics Changes - The companion animal portfolio generated $1.5 billion in revenue, growing 9% operationally, with significant contributions from the Simparica franchise, key dermatology, and OA pain mAbs [22][23][24] - Livestock revenue declined 2% on an organic operational basis, primarily due to aggressive price competition [24][27] - The U.S. segment grew 2% on a reported basis and 6% on an organic operational basis, with companion animal growing 8% and livestock declining [24][27] Market Data and Key Metrics Changes - The international segment's revenue was flat on a reported basis but grew 11% on an organic operational basis, with companion animal growing 10% and livestock growing 12% [27][31] - The international Simparica franchise grew 23% operationally, driven by strong market share gains in Latin America and Eastern Europe [28][31] - The livestock segment's growth was supported by higher prices and volume growth in poultry vaccines across Asia, the Middle East, and Latin America [31] Company Strategy and Development Direction - The company maintains a full-year organic operational revenue guidance range of 6% to 8%, reflecting confidence in its diversified portfolio [19][36] - The focus remains on executing a multi-levered strategy, emphasizing innovation, operational excellence, and strategic capital allocation [10][21] - The company is investing in medical education and direct-to-consumer campaigns to drive awareness and adoption of its products, particularly in the OA pain market [15][17][61] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the animal health industry despite macroeconomic uncertainties, highlighting the essential nature of their business [9][19] - The company is adapting to challenges while seizing opportunities, maintaining a strong balance sheet and operational excellence [10][21] - Future guidance reflects potential impacts from enacted tariffs, with a focus on navigating the dynamic environment [36][37] Other Important Information - The adjusted gross margin was 72.1%, growing 140 basis points on a reported basis, with foreign exchange having a favorable impact [32] - The company is actively monitoring the FDA and USDA for any potential delays or backlogs in product approvals [83][84] - Retail sales grew 40% in the quarter, with alternative channels continuing to gain traction [86][88] Q&A Session Summary Question: Insights on Librela and Tariffs - Management reported 15% organic operating growth for Librela globally, with strong vet satisfaction and ongoing education efforts [41][42] - The tariff impact embedded in guidance primarily relates to imports from China, with a net headwind of $20 million expected [44][72] Question: Competitive Landscape - The company noted that competition in dermatology and parasiticides remains strong, with a focus on maintaining market share through innovation and first-mover advantages [49][53] - Despite new entrants, the company continues to see growth in its key franchises, with double-digit growth expected [58][60] Question: Consumer Sentiment and Compliance - Management acknowledged a more measured approach to managing chronic conditions among consumers, but remains confident in the durability of the animal health industry [94] - The company expects price and volume mix to remain consistent with previous expectations, with a focus on maintaining growth across its portfolio [96]
Zoetis(ZTS) - 2025 Q1 - Earnings Call Transcript
2025-05-06 12:30
Financial Data and Key Metrics Changes - The company reported $2.2 billion in revenue for Q1 2025, growing 1% on a reported basis and 9% on an organic operational basis, driven by 4% price and 5% volume growth [22][19] - Adjusted net income was $662 million, growing 4% on a reported basis and 6% on an organic operational basis [22][19] - Adjusted gross margin increased to 72.1%, growing 140 basis points on a reported basis [33] Business Line Data and Key Metrics Changes - The companion animal portfolio generated $1.5 billion in revenue, growing 9% operationally [22] - The Simparica franchise contributed $367 million, growing 19%, while key dermatology posted $387 million, growing 10% [22] - Livestock revenue declined 2% on an organic operational basis, primarily due to aggressive price competition [28] Market Data and Key Metrics Changes - The U.S. segment grew 2% on a reported basis and 6% on an organic operational basis, with companion animal growing 8% and livestock declining 2% [24] - International revenue was flat on a reported basis but grew 11% on an organic operational basis, with companion animal growing 10% and livestock growing 12% [28] Company Strategy and Development Direction - The company is focused on executing its strategy with discipline, supported by a strong balance sheet and operational excellence [9] - The company aims to maintain its full-year organic operational revenue guidance range of 6% to 8% [19] - The company is investing in medical education and direct-to-consumer campaigns to drive awareness and adoption of its products [16][62] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the resilience of the animal health industry despite macroeconomic uncertainties [19] - The company is maintaining its full-year adjusted net income guidance of $2.775 billion to $2.825 billion, reflecting operational growth of 5% to 7% [38] - Management highlighted the importance of innovation and customer engagement in navigating the current environment [20] Other Important Information - The company received conditional licensure from the USDA for an avian influenza vaccine for chickens [17] - The company is actively monitoring the impact of tariffs and has reflected the net impact of current tariffs in its guidance [46][73] Q&A Session Summary Question: What is the response to the Librela label change and the tariff impacts? - Management reported a 15% organic operating growth in Librela globally, with strong vet satisfaction and ongoing education efforts [42][44] - The tariff impact embedded in guidance primarily relates to imports from China and is expected to be around $20 million [46][73] Question: What competitive pressures are being faced in the market? - Management acknowledged competitive entrants but emphasized the company's first-mover advantage and continued growth in key franchises [51][54] Question: How is the company addressing consumer sentiment and compliance? - Management noted a more measured approach to managing chronic conditions but remains confident in the durability of the animal health industry [94] Question: What are the expectations for price and volume for the rest of the year? - The company expects price to be above historical levels but below those of the previous years, with volume growth remaining strong [97]
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].