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Zoetis (ZTS) Up 6.4% Since Earnings Report: Can It Continue?
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A month has gone by since the last earnings report for Zoetis Inc. (ZTS - Free Report) . Shares have added about 6.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Zoetis Beats Earnings, Revenue Estimates in Q1
Zoetis first-quarter 2017 earnings of $0.53 per share increased 10% year over year and surpassed the Zacks Consensus Estimate of $0.48.
Total revenue growth was up 6% operationally (excluding the impact of currecy) to $1.23 billion year over year in the quarter and beat the Zacks Consensus Estimate of $1.19 billion.
Quarterly Highlights
Zoetis manages its business across two regional operating segments – the U.S. and International. Within these segments, the company offers a diverse portfolio of products for livestock and companion animals.
Revenues in the U.S. segment were up 4% to $605 million. Within this segment, sales of companion animal products were up 10%, reflecting higher sales of Apoquel and other product launches (Simparica Chewables and Cytopoint). However, Livestock revenues slipped 2% mainly due to decreased sales of swine and cattle products.
Revenues at the International segment grew 8% (up 9% operationally) on a reported basis to $615 million on a reported basis. Sales of livestock products were up 7% on a reported and operational basis in the quarter due to increased sales of swine products in China and Vietnam, and cattle products in Brazil. Nonetheless, livestock sales were adversely impacted by product rationalizations.
Sales of companion animal products grew 13% on a reported basis (up 15% operationally), driven by higher sales of Apoquel, new product launches, particularly Simparica and increased demand in China for the companion animal vaccines portfolio
2017 Outlook
Zoetis reiterated its outlook for 2017. The company expects earnings in the range of $2.26 to $2.36 per share on revenues in $5.10 billion and $5.225 billion band. The Zacks Consensus Estimate for earnings is $2.67 per share on revenues of $5.49 billion.
Other Updates
The company received approval for Cytopoint in the European Union in Apr 2017 and in Canada in Mar 2017. The approval will help the company to strengthen its canine dermatology portfolio. In fact, Cytopoint is the first monoclonal antibody (mAb) therapy approved to help provide a reduction in the clinical signs associated with atopic dermatitis such as itching in dogs. Also, Zoetis received European Commission approval for Stronghold Plus in Feb 2017. It is a topical combination product that treats ticks, fleas, ear mites, lice and gastrointestinal worms and prevents heartworm disease in cats.
During the quarter the company inked a deal to purchase Nexvet Biopharma plc, as well. The latter is an innovator in monoclonal antibody therapies for companion animals used in managing chronic pain as well as in other therapeutic areas.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
At this time, Zoetis' stock has a subpar Growth Score of 'D', a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #2 (Buy). We are looking for an above average return from the stock in the next few months
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Zoetis (ZTS) Up 6.4% Since Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Zoetis Inc. (ZTS - Free Report) . Shares have added about 6.4% in that time frame, outperforming the market.
Will the recent positive trend continue leading up to the stock's next earnings release, or is it due for a pullback? Before we dive into how investors and analysts have reacted of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Zoetis Beats Earnings, Revenue Estimates in Q1
Zoetis first-quarter 2017 earnings of $0.53 per share increased 10% year over year and surpassed the Zacks Consensus Estimate of $0.48.
Total revenue growth was up 6% operationally (excluding the impact of currecy) to $1.23 billion year over year in the quarter and beat the Zacks Consensus Estimate of $1.19 billion.
Quarterly Highlights
Zoetis manages its business across two regional operating segments – the U.S. and International. Within these segments, the company offers a diverse portfolio of products for livestock and companion animals.
Revenues in the U.S. segment were up 4% to $605 million. Within this segment, sales of companion animal products were up 10%, reflecting higher sales of Apoquel and other product launches (Simparica Chewables and Cytopoint). However, Livestock revenues slipped 2% mainly due to decreased sales of swine and cattle products.
Revenues at the International segment grew 8% (up 9% operationally) on a reported basis to $615 million on a reported basis. Sales of livestock products were up 7% on a reported and operational basis in the quarter due to increased sales of swine products in China and Vietnam, and cattle products in Brazil. Nonetheless, livestock sales were adversely impacted by product rationalizations.
Sales of companion animal products grew 13% on a reported basis (up 15% operationally), driven by higher sales of Apoquel, new product launches, particularly Simparica and increased demand in China for the companion animal vaccines portfolio
2017 Outlook
Zoetis reiterated its outlook for 2017. The company expects earnings in the range of $2.26 to $2.36 per share on revenues in $5.10 billion and $5.225 billion band. The Zacks Consensus Estimate for earnings is $2.67 per share on revenues of $5.49 billion.
Other Updates
The company received approval for Cytopoint in the European Union in Apr 2017 and in Canada in Mar 2017. The approval will help the company to strengthen its canine dermatology portfolio. In fact, Cytopoint is the first monoclonal antibody (mAb) therapy approved to help provide a reduction in the clinical signs associated with atopic dermatitis such as itching in dogs.
Also, Zoetis received European Commission approval for Stronghold Plus in Feb 2017. It is a topical combination product that treats ticks, fleas, ear mites, lice and gastrointestinal worms and prevents heartworm disease in cats.
During the quarter the company inked a deal to purchase Nexvet Biopharma plc, as well. The latter is an innovator in monoclonal antibody therapies for companion animals used in managing chronic pain as well as in other therapeutic areas.
How Have Estimates Been Moving Since Then?
Following the release, investors have witnessed a downward trend in fresh estimates. There has been one revision lower for the current quarter.
Zoetis Inc. Price and Consensus
Zoetis Inc. Price and Consensus | Zoetis Inc. Quote
VGM Scores
At this time, Zoetis' stock has a subpar Growth Score of 'D', a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of 'D' on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of 'D'. If you aren't focused on one strategy, this score is the one you should be interested in.
Our style scores indicate investors will probably be better served looking elsewhere.
Outlook
Estimates have been broadly trending downward for the stock. The magnitude of this revision also indicates a downward shift. Interestingly, the stock has a Zacks Rank #2 (Buy). We are looking for an above average return from the stock in the next few months