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Zoetis' (ZTS) Q1 Earnings and Revenues Surpass Estimates
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Zoetis Inc. (ZTS - Free Report) posted first-quarter 2021 adjusted earnings of $1.26 per share (excluding one-time items), which were up from the year-ago quarter’s earnings of 95 cents and ahead of the Zacks Consensus Estimate of $1.04.
Total revenues grew 22% year over year to $1.9 billion, which beat the Zacks Consensus Estimate of $1.73 billion.
Shares of Zoetis have increased 5% in the year so far against the industry's decline of 10.9%.
Quarterly Highlights
Zoetis derives majority of its revenues from a diversified product portfolio of medicines and vaccines used to treat and protect livestock and companion animals. The company reports business results under two geographical operating segments — the United States and International.
Revenues from the United States segment increased 19% year over year to $933 million in the first quarter. Sales of companion animal products in this region grew 32%, primarily owing to higher sales of the SimparicaTrio – the recently launched triple combination parasiticide for dogs. Apoquel and Cytopoint brands in the dermatology portfolio also led to this increase. However, sales of livestock products decreased 4% in the quarter.
Sales of cattle products increased year over year as a result of successful promotional activities. Sales of swine products declined in the reported quarter due to a non-recurring government purchase which was made in the year-ago quarter. Also, sale of poultry products declined in the quarter due to the expanded use of lower-cost alternatives for premium products.
Revenues in the International segment increased 27% year over year on a reported basis (up 25% operationally) to $922 million. Livestock sales increased 17% both on a reported basis and operationally. Notably, sales of swine products surged as a result of expanding herd production and beefed-up biosecurity measures in the wake of the African Swine Fever. Sales of companion animal products grew 40% on a reported and 37% on an operational basis.
The Simparica franchise, including Simparica Trio, which was recently launched in the EU, Canada and Australia, and the company’s key dermatology portfolio consisting of both Apoquel and Cytopoint brands, led to the growth. Growth in the company’s fish portfolio was driven primarily by increased vaccine sales in key salmon markets and the acquisition of Fish Vet Group. Poultry sales grew modestly year-over-year.
In February 2021, the European Commission granted marketing authorization to Solensia (frunevetmab) – a new feline osteoarthritis ("OA") treatment to alleviate pain. Solensia is the first injectable mAb licensed for the alleviation of pain associated with OA in cats.
2021 Guidance
Zoetis updated the financial guidance it provided earlier this year.
The company now expects adjusted earnings of $4.42-$4.51 per share compared with the earlier projection of $4.36-$4.46.
Revenues are now projected between $7.500-$7.625 billion compared with the earlier expectation of $7.400-$7.550 billion.
Our Take
Zoetis exceeded first-quarter earnings and sales estimates, driven by the strong uptake of companion animal portfolio products. The company raised in financial guidance for 2021. It also expects to continue grow its revenues, driven by continued strength in petcare portfolio, ongoing expansion in markets outside the United States and the acceleration of its diagnostics portfolio penetration.
Zoetis currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include Onconova Therapeutics, Inc. , Infinity Pharmaceuticals, Inc. and Regulus Therapeutics Inc. (RGLS - Free Report) , all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Onconova’s loss per share estimates have narrowed 10% for 2021 and 14.3% for 2022 over the past 60 days. The stock has rallied 31.7% year to date.
Infinity’s loss per share estimates have narrowed 8.3% for 2021 and 14.9% for 2022 over the past 60 days. The stock has soared49.5% year to date.
Regulus’ loss per share estimates have narrowed 4.9% for 2021 and 11.6% for 2022 over the past 60 days.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
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Zoetis' (ZTS) Q1 Earnings and Revenues Surpass Estimates
Zoetis Inc. (ZTS - Free Report) posted first-quarter 2021 adjusted earnings of $1.26 per share (excluding one-time items), which were up from the year-ago quarter’s earnings of 95 cents and ahead of the Zacks Consensus Estimate of $1.04.
Total revenues grew 22% year over year to $1.9 billion, which beat the Zacks Consensus Estimate of $1.73 billion.
Shares of Zoetis have increased 5% in the year so far against the industry's decline of 10.9%.
Quarterly Highlights
Zoetis derives majority of its revenues from a diversified product portfolio of medicines and vaccines used to treat and protect livestock and companion animals. The company reports business results under two geographical operating segments — the United States and International.
Revenues from the United States segment increased 19% year over year to $933 million in the first quarter. Sales of companion animal products in this region grew 32%, primarily owing to higher sales of the SimparicaTrio – the recently launched triple combination parasiticide for dogs. Apoquel and Cytopoint brands in the dermatology portfolio also led to this increase. However, sales of livestock products decreased 4% in the quarter.
Sales of cattle products increased year over year as a result of successful promotional activities. Sales of swine products declined in the reported quarter due to a non-recurring government purchase which was made in the year-ago quarter. Also, sale of poultry products declined in the quarter due to the expanded use of lower-cost alternatives for premium products.
Revenues in the International segment increased 27% year over year on a reported basis (up 25% operationally) to $922 million. Livestock sales increased 17% both on a reported basis and operationally. Notably, sales of swine products surged as a result of expanding herd production and beefed-up biosecurity measures in the wake of the African Swine Fever. Sales of companion animal products grew 40% on a reported and 37% on an operational basis.
The Simparica franchise, including Simparica Trio, which was recently launched in the EU, Canada and Australia, and the company’s key dermatology portfolio consisting of both Apoquel and Cytopoint brands, led to the growth. Growth in the company’s fish portfolio was driven primarily by increased vaccine sales in key salmon markets and the acquisition of Fish Vet Group. Poultry sales grew modestly year-over-year.
In February 2021, the European Commission granted marketing authorization to Solensia (frunevetmab) – a new feline osteoarthritis ("OA") treatment to alleviate pain. Solensia is the first injectable mAb licensed for the alleviation of pain associated with OA in cats.
2021 Guidance
Zoetis updated the financial guidance it provided earlier this year.
The company now expects adjusted earnings of $4.42-$4.51 per share compared with the earlier projection of $4.36-$4.46.
Revenues are now projected between $7.500-$7.625 billion compared with the earlier expectation of $7.400-$7.550 billion.
Our Take
Zoetis exceeded first-quarter earnings and sales estimates, driven by the strong uptake of companion animal portfolio products. The company raised in financial guidance for 2021. It also expects to continue grow its revenues, driven by continued strength in petcare portfolio, ongoing expansion in markets outside the United States and the acceleration of its diagnostics portfolio penetration.
Zoetis Inc. Price, Consensus and EPS Surprise
Zoetis Inc. price-consensus-eps-surprise-chart | Zoetis Inc. Quote
Zacks Rank & Stocks to Consider
Zoetis currently carries a Zacks Rank #3 (Hold). Better-ranked stocks in the same sector include Onconova Therapeutics, Inc. , Infinity Pharmaceuticals, Inc. and Regulus Therapeutics Inc. (RGLS - Free Report) , all carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Onconova’s loss per share estimates have narrowed 10% for 2021 and 14.3% for 2022 over the past 60 days. The stock has rallied 31.7% year to date.
Infinity’s loss per share estimates have narrowed 8.3% for 2021 and 14.9% for 2022 over the past 60 days. The stock has soared49.5% year to date.
Regulus’ loss per share estimates have narrowed 4.9% for 2021 and 11.6% for 2022 over the past 60 days.
Zacks Top 10 Stocks for 2021
In addition to the stocks discussed above, would you like to know about our 10 best buy-and-hold tickers for the entirety of 2021?
Last year's 2020Zacks Top 10 Stocks portfolio returned gains as high as +386.8%. Now a brand-new portfolio has been handpicked from over 4,000 companies covered by the Zacks Rank. Don’t miss your chance to get in on these long-term buys.
AccessZacks Top 10 Stocks for 2021 today >>