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Zoetis (ZTS) Down 4.3% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Zoetis (ZTS - Free Report) . Shares have lost about 4.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Zoetis due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Zoetis Q4 Earnings Miss Expectations, Sales Beat
Zoetis delivered fourth-quarter 2023 adjusted earnings (excluding one-time items) of $1.24 per share, which missed the Zacks Consensus Estimate of $1.33. In the year-ago quarter, the company delivered earnings of $1.15 per share.
Total revenues grew 8% year over year to $2.21 billion, surpassing the Zacks Consensus Estimate of $2.19 billion in the reported quarter.
Quarterly Highlights
Zoetis derives the 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 U.S. segment increased 9% year over year to $1.21 billion in the fourth quarter, beating the Zacks Consensus Estimate of $1.19 billion. The reported figure beat our estimate of $1.16 billion in total U.S. revenues.
Sales of companion animal products in the U.S. region rose 10% from the prior-year quarter’s level, primarily driven by Zoetis’ monoclonal antibody products for osteoarthritis (OA) pain, Librela for dogs and Solensiafor cats, as well as its flea, tick and heartworm combination product for dogs, Simparica Trio. The uptick was also fueled by the company’s key dermatology portfolio, including Apoqueland Cytopoint.
Sales of livestock products rose 4% year over year in the reported quarter, due to an increase in cattle and swine product sales as a result of increased supply of vaccines. Revenues from poultry products also increased, driven by the sales growth of medicated feed additivesand the expanded use of Zoamix.
Revenues in the International segment improved 9% year over year and 8% on an operational basis to $982 million in the fourth quarter, beating the Zacks Consensus Estimate of $971 million. However, the reported figure missed our estimate of $1 billion in total International revenues.
Sales of companion animal products grew 13% on a reported basis and 10% on an operational basis, driven by growth in several key products. These included OA pain products, Librela for dogs and Solensia for cats, dermatology products like Apoquel and Cytopoint as well as Zoetis’ parasiticide products, such as Simparica and the Simparica Trio.
On a year-over-year basis, livestock product sales increased 5% on a reported basis and 7% operationally. Growth in both the cattle and poultry portfolios was driven largely by price increases across the broader international segment.
In the fourth quarter, Zoetis’ fish portfolio also witnessed an uptick in sales on the back of a new vaccine launch in Norway.
However, sales in the sheep product portfolio in the international segment declined due to unfavorable market conditions in Australia and New Zealand. Swine product sales also suffered in China primarily due to unfavorable market conditions and a comparatively more difficult period compared with the year-ago quarter.
Full-Year 2023 Results
Zoetis posted 2023 adjusted earnings of $5.32 per share (excluding one-time items), which increased from the year-ago figure of $4.88 but missed the Zacks Consensus Estimate of $5.41.
Total revenues grew 6% year over year to $8.54 billion, which beat the Zacks Consensus Estimate of $8.52 billion.
2024 Guidance
Zoetis expects adjusted earnings in the range of $5.74-$5.84 per share in 2024.
Revenues are projected between $9.075 billion and $9.225 billion, representing an expected operational growth of 7-9%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Zoetis has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Zoetis has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.
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Zoetis (ZTS) Down 4.3% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Zoetis (ZTS - Free Report) . Shares have lost about 4.3% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Zoetis due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Zoetis Q4 Earnings Miss Expectations, Sales Beat
Zoetis delivered fourth-quarter 2023 adjusted earnings (excluding one-time items) of $1.24 per share, which missed the Zacks Consensus Estimate of $1.33. In the year-ago quarter, the company delivered earnings of $1.15 per share.
Total revenues grew 8% year over year to $2.21 billion, surpassing the Zacks Consensus Estimate of $2.19 billion in the reported quarter.
Quarterly Highlights
Zoetis derives the 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 U.S. segment increased 9% year over year to $1.21 billion in the fourth quarter, beating the Zacks Consensus Estimate of $1.19 billion. The reported figure beat our estimate of $1.16 billion in total U.S. revenues.
Sales of companion animal products in the U.S. region rose 10% from the prior-year quarter’s level, primarily driven by Zoetis’ monoclonal antibody products for osteoarthritis (OA) pain, Librela for dogs and Solensiafor cats, as well as its flea, tick and heartworm combination product for dogs, Simparica Trio. The uptick was also fueled by the company’s key dermatology portfolio, including Apoqueland Cytopoint.
Sales of livestock products rose 4% year over year in the reported quarter, due to an increase in cattle and swine product sales as a result of increased supply of vaccines. Revenues from poultry products also increased, driven by the sales growth of medicated feed additivesand the expanded use of Zoamix.
Revenues in the International segment improved 9% year over year and 8% on an operational basis to $982 million in the fourth quarter, beating the Zacks Consensus Estimate of $971 million. However, the reported figure missed our estimate of $1 billion in total International revenues.
Sales of companion animal products grew 13% on a reported basis and 10% on an operational basis, driven by growth in several key products. These included OA pain products, Librela for dogs and Solensia for cats, dermatology products like Apoquel and Cytopoint as well as Zoetis’ parasiticide products, such as Simparica and the Simparica Trio.
On a year-over-year basis, livestock product sales increased 5% on a reported basis and 7% operationally. Growth in both the cattle and poultry portfolios was driven largely by price increases across the broader international segment.
In the fourth quarter, Zoetis’ fish portfolio also witnessed an uptick in sales on the back of a new vaccine launch in Norway.
However, sales in the sheep product portfolio in the international segment declined due to unfavorable market conditions in Australia and New Zealand. Swine product sales also suffered in China primarily due to unfavorable market conditions and a comparatively more difficult period compared with the year-ago quarter.
Full-Year 2023 Results
Zoetis posted 2023 adjusted earnings of $5.32 per share (excluding one-time items), which increased from the year-ago figure of $4.88 but missed the Zacks Consensus Estimate of $5.41.
Total revenues grew 6% year over year to $8.54 billion, which beat the Zacks Consensus Estimate of $8.52 billion.
2024 Guidance
Zoetis expects adjusted earnings in the range of $5.74-$5.84 per share in 2024.
Revenues are projected between $9.075 billion and $9.225 billion, representing an expected operational growth of 7-9%.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
Currently, Zoetis has an average Growth Score of C, however its Momentum Score is doing a bit better with a B. However, 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 C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Zoetis has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.