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Zoetis Inc. (ZTS - Free Report) reported third-quarter 2022 adjusted earnings of $1.21 per share (excluding one-time items), which missed the Zacks Consensus Estimate of $1.24 per share. In the year-ago quarter, the company reported earnings of $1.25 per share.
Total revenues grew 1% year over year to $2.0 billion, which missed the Zacks Consensus Estimate of $2.07 billion.
Shares of Zoetis were down 10.76% in the pre-market trading session on Nov 3. The stock has plunged 39.2% this year compared with the industry’s 30.5% decline.
Image Source: Zacks Investment Research
Quarterly Highlights
Zoetis derives most 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 — United States and International.
Revenues from the U.S. segment increased 2% year over year to $1.09 billion in the third quarter. Sales of companion animal products in this region increase 6% from the prior-year quarter’s levels, primarily owing to higher sales of Simparica Trio, the triple-combination parasiticide for dogs. The Apoquel and Cytopoint brands in the dermatology portfolio also led to this increase. However, sales of livestock products declined 7% year over year for the quarter due to a decline in cattle product sales due to generic competition for Draxxin.
In the reported quarter, sales of swine products in the U.S segment declined due to increased competition for vaccines. Sales of poultry products also declined in the quarter due to the expanded use of lower-cost alternatives and generic competition for Zoamix.
Revenues in the International segment increased 2% year over year on a reported and 8% on an operational basis to $889 million. Sales of companion animal products rose 6% year over year on a reported and 17% on an operational basis. The growth can be attributed to the recent launch of Librela and Solensia, the company’s monoclonal antibody (mAb) therapies for dogs and cats and due to the increased sales of its Apoquel and Cytopoint brands in the dermatology portfolio.
In the international segment, livestock product sales declined 8% year over year on a reported basis and were flat operationally. Sales of poultry products improved owing to market growth and demand generation efforts across the Latin American markets. Sales of sheep products also witnessed growth due to favorable market conditions and new product launches in Australia. The company also witnessed improvement in its fish portfolio, owing to increased vaccine sales across key salmon markets, including Chile and Norway.
However, growth in the sheep, poultry and fish business segments was offset by reduced sales across the company’s swine and cattle portfolios. Zoetis’ cattle products sales in the international market decreased as a result of supply constraints and also due to an unfavorable macro environment for producers in Brazil. In the third quarter, swine product sales declined due to supply constraints across international markets. Lower sales across Europe due to reduced exports to China. Consequently, higher input costs for producers also affected the sales of swine products for Zoetis.
2022 Guidance
Owing to the negative impact of foreign exchange rates, veterinary workforce challengesand constant supply chain constraints Zoetis has lowered its full-year 2022 guidance.
The company now expects adjusted earnings in the range of $4.83-$4.90 per share compared with the previous expectation of $4.97-$5.05 per share.
Revenues are now projected between $8.000 to $8.075 billion compared with the previous range of $8.225 to $8.325 billion.
Our Take
Zoetis missed earnings and sales estimates in the third quarter, as a result of supply constraints, especially in the international markets. Thus, the company slightly lowered its financial guidance for 2022.
Assertio’s earnings estimates for 2022 have remained steady at 51 cents over the past 30 days. Shares of Ionis have returned 21.6% year to date. Earnings of ASRT beat estimates in three of the last four quarters and missed the mark on the remaining occasion. ASRT delivered an earnings surprise of 126.39%, on average.
Aerie’s loss estimates for 2022 have remained steady at $1.82 in the past 30 days. Shares of Aerie have returned 116.7% year to date. Earnings of AERI beat earnings estimates in two of the trailing four quarters, while missing the same in the remaining two occasions. AERI delivered an earnings surprise of 70.27%, on average.
Neurocrine’s earnings estimates for 2022 have improved from $1.73 to $1.80 in the past 30 days. Shares of NBIX have returned 43.3% year to date. Earnings of NBIX missed earnings estimates in all the last four quarters. NBIX delivered a negative earnings surprise of 80.17%, on average.
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Zoetis' (ZTS) Lags Q3 Earnings Estimates, Lowers 2022 Guidance
Zoetis Inc. (ZTS - Free Report) reported third-quarter 2022 adjusted earnings of $1.21 per share (excluding one-time items), which missed the Zacks Consensus Estimate of $1.24 per share. In the year-ago quarter, the company reported earnings of $1.25 per share.
Total revenues grew 1% year over year to $2.0 billion, which missed the Zacks Consensus Estimate of $2.07 billion.
Shares of Zoetis were down 10.76% in the pre-market trading session on Nov 3. The stock has plunged 39.2% this year compared with the industry’s 30.5% decline.
Image Source: Zacks Investment Research
Quarterly Highlights
Zoetis derives most 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 — United States and International.
Revenues from the U.S. segment increased 2% year over year to $1.09 billion in the third quarter. Sales of companion animal products in this region increase 6% from the prior-year quarter’s levels, primarily owing to higher sales of Simparica Trio, the triple-combination parasiticide for dogs. The Apoquel and Cytopoint brands in the dermatology portfolio also led to this increase. However, sales of livestock products declined 7% year over year for the quarter due to a decline in cattle product sales due to generic competition for Draxxin.
In the reported quarter, sales of swine products in the U.S segment declined due to increased competition for vaccines. Sales of poultry products also declined in the quarter due to the expanded use of lower-cost alternatives and generic competition for Zoamix.
Revenues in the International segment increased 2% year over year on a reported and 8% on an operational basis to $889 million. Sales of companion animal products rose 6% year over year on a reported and 17% on an operational basis. The growth can be attributed to the recent launch of Librela and Solensia, the company’s monoclonal antibody (mAb) therapies for dogs and cats and due to the increased sales of its Apoquel and Cytopoint brands in the dermatology portfolio.
In the international segment, livestock product sales declined 8% year over year on a reported basis and were flat operationally. Sales of poultry products improved owing to market growth and demand generation efforts across the Latin American markets. Sales of sheep products also witnessed growth due to favorable market conditions and new product launches in Australia. The company also witnessed improvement in its fish portfolio, owing to increased vaccine sales across key salmon markets, including Chile and Norway.
However, growth in the sheep, poultry and fish business segments was offset by reduced sales across the company’s swine and cattle portfolios. Zoetis’ cattle products sales in the international market decreased as a result of supply constraints and also due to an unfavorable macro environment for producers in Brazil. In the third quarter, swine product sales declined due to supply constraints across international markets. Lower sales across Europe due to reduced exports to China. Consequently, higher input costs for producers also affected the sales of swine products for Zoetis.
2022 Guidance
Owing to the negative impact of foreign exchange rates, veterinary workforce challengesand constant supply chain constraints Zoetis has lowered its full-year 2022 guidance.
The company now expects adjusted earnings in the range of $4.83-$4.90 per share compared with the previous expectation of $4.97-$5.05 per share.
Revenues are now projected between $8.000 to $8.075 billion compared with the previous range of $8.225 to $8.325 billion.
Our Take
Zoetis missed earnings and sales estimates in the third quarter, as a result of supply constraints, especially in the international markets. Thus, the company slightly lowered its financial guidance for 2022.
Zoetis Inc. Price, Consensus and EPS Surprise
Zoetis Inc. price-consensus-eps-surprise-chart | Zoetis Inc. Quote
Zacks Rank and Stocks to Consider
Zoetis currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the same sector are Assertio (ASRT - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Aerie Pharmaceuticals and NeurocrineBiosciences (NBIX - Free Report) , each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Assertio’s earnings estimates for 2022 have remained steady at 51 cents over the past 30 days. Shares of Ionis have returned 21.6% year to date. Earnings of ASRT beat estimates in three of the last four quarters and missed the mark on the remaining occasion. ASRT delivered an earnings surprise of 126.39%, on average.
Aerie’s loss estimates for 2022 have remained steady at $1.82 in the past 30 days. Shares of Aerie have returned 116.7% year to date. Earnings of AERI beat earnings estimates in two of the trailing four quarters, while missing the same in the remaining two occasions. AERI delivered an earnings surprise of 70.27%, on average.
Neurocrine’s earnings estimates for 2022 have improved from $1.73 to $1.80 in the past 30 days. Shares of NBIX have returned 43.3% year to date. Earnings of NBIX missed earnings estimates in all the last four quarters. NBIX delivered a negative earnings surprise of 80.17%, on average.