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Zoetis Q3 Earnings & Revenues Beat, '24 Outlook Raised, Stock Up
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Zoetis, Inc. (ZTS - Free Report) delivered third-quarter 2024 adjusted earnings (excluding one-time items) of $1.58 per share, which surpassed the Zacks Consensus Estimate of $1.46 per share. In the year-ago quarter, the company delivered adjusted earnings of $1.36 per share.
Total revenues grew 11% year over year to $2.39 billion in the reported quarter, which beat the Zacks Consensus Estimate of $2.29 billion. In the year-ago quarter, the company reported total revenues of $2.15 billion.
Shares of Zoetis are gaining in the pre-market hours in response to the better-than-expected results in the third quarter.
Stay up-to-date with all quarterly releases:See Zacks Earnings Calendar.
ZTS’ Q3 Results in Detail
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 15% year over year to $1.35 billion in the reported quarter, beating both the Zacks Consensus Estimate as well as our model estimate of $1.27 billion and $1.24 billion, respectively.
Sales of companion animal products in the U.S. region jumped 18% from the prior-year quarter’s level to $1.07 billion, 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 in the United States increased 5% in the third quarter to $278 million, mainly driven by higher sales ofcattle and swine products due to improved supply of ceftiofur compared with the year-ago quarter.
Shares of the company have lost 7.8% in the year-to-date period compared with the industry’s 4.2% decline.
Image Source: Zacks Investment Research
Revenues in the International segment improved 7% year over year on a reported basis and 13% on an operational basis to $1.021 billion, beating the Zacks Consensus Estimate of $996.4 million as well as our model estimate of $1.016 billion.
Sales of companion animal products rose 7% on a reported basis and 11% on an operational basis to $541 million, 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 7% on a reported basis and 15% operationally to $480 million. Growth in both the cattle and poultry portfolios was driven largely by price increases across the broader international segment, as well as the timing of certain customer purchases. Additionally, sales of fish products grew due to increased demand for vaccines in Norway.
ZTS Raises 2024 Guidance
Zoetis now expects adjusted diluted earnings in the range of $5.86-$5.92 per share in 2024 compared with the previous guidance of $5.78-$5.88.
Revenues are now projected between $9.2 billion and $9.3 billion, suggesting an operational growth of 10-11%. Total revenues were previously projected between $9.10 billion and $9.25 billion.
This can also be a reason for the upward movement of the stock price.
Our Take
Zoetis reports better-than-expected third-quarter results as earnings and revenues both beat estimates. Sales in the reported quarter were driven by the strong uptake of companion animal portfolio products. ZTS expects to continue witnessing revenue growth, driven by the persistent strength of the pet care portfolio, key dermatology products, ongoing expansion in markets outside the United States and the acceleration of its diagnostics portfolio penetration. The increase in annual guidance is also reassuring.
Estimates for Bayer’s 2024 earnings per share (EPS) have increased from $1.37 to $1.38 over the past 60 days, while the same for 2025 have remained constant at $1.44. BAYRY’s shares have lost 26.3% year to date.
Allogene Therapeutics’ loss estimates have remained constant at $1.41 per share for 2024 over the past 60 days, while that for 2025 has narrowed from $1.46 to $1.45 per share. ALLO’s shares have lost 15.3% year to date.
Allogene Therapeutics’ earnings beat estimates in three of the trailing four quarters and matched once, delivering an average surprise of 11.82%.
Novartis’ EPS estimates have risen from $7.48 to $7.56 per share for 2024 over the past 60 days, while that for 2025 has increased from $8.30 to $8.33. NVS’ shares have risen 8.3% year to date.
Novartis’ earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 2.22%.
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Zoetis Q3 Earnings & Revenues Beat, '24 Outlook Raised, Stock Up
Zoetis, Inc. (ZTS - Free Report) delivered third-quarter 2024 adjusted earnings (excluding one-time items) of $1.58 per share, which surpassed the Zacks Consensus Estimate of $1.46 per share. In the year-ago quarter, the company delivered adjusted earnings of $1.36 per share.
Total revenues grew 11% year over year to $2.39 billion in the reported quarter, which beat the Zacks Consensus Estimate of $2.29 billion. In the year-ago quarter, the company reported total revenues of $2.15 billion.
Shares of Zoetis are gaining in the pre-market hours in response to the better-than-expected results in the third quarter.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
ZTS’ Q3 Results in Detail
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 15% year over year to $1.35 billion in the reported quarter, beating both the Zacks Consensus Estimate as well as our model estimate of $1.27 billion and $1.24 billion, respectively.
Sales of companion animal products in the U.S. region jumped 18% from the prior-year quarter’s level to $1.07 billion, 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 in the United States increased 5% in the third quarter to $278 million, mainly driven by higher sales ofcattle and swine products due to improved supply of ceftiofur compared with the year-ago quarter.
Shares of the company have lost 7.8% in the year-to-date period compared with the industry’s 4.2% decline.
Image Source: Zacks Investment Research
Revenues in the International segment improved 7% year over year on a reported basis and 13% on an operational basis to $1.021 billion, beating the Zacks Consensus Estimate of $996.4 million as well as our model estimate of $1.016 billion.
Sales of companion animal products rose 7% on a reported basis and 11% on an operational basis to $541 million, 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 7% on a reported basis and 15% operationally to $480 million. Growth in both the cattle and poultry portfolios was driven largely by price increases across the broader international segment, as well as the timing of certain customer purchases. Additionally, sales of fish products grew due to increased demand for vaccines in Norway.
ZTS Raises 2024 Guidance
Zoetis now expects adjusted diluted earnings in the range of $5.86-$5.92 per share in 2024 compared with the previous guidance of $5.78-$5.88.
Revenues are now projected between $9.2 billion and $9.3 billion, suggesting an operational growth of 10-11%. Total revenues were previously projected between $9.10 billion and $9.25 billion.
This can also be a reason for the upward movement of the stock price.
Our Take
Zoetis reports better-than-expected third-quarter results as earnings and revenues both beat estimates. Sales in the reported quarter were driven by the strong uptake of companion animal portfolio products. ZTS expects to continue witnessing revenue growth, driven by the persistent strength of the pet care portfolio, key dermatology products, ongoing expansion in markets outside the United States and the acceleration of its diagnostics portfolio penetration. The increase in annual guidance is also reassuring.
Zoetis Inc. Price and Consensus
Zoetis Inc. price-consensus-chart | Zoetis Inc. Quote
ZTS’ Zacks Rank and Stocks to Consider
Zoetis currently carries a Zacks Rank #3 (Hold).
Some better-ranked pharma stocks are Bayer (BAYRY - Free Report) , Allogene Therapeutics (ALLO - Free Report) and Novartis (NVS - Free Report) , each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Estimates for Bayer’s 2024 earnings per share (EPS) have increased from $1.37 to $1.38 over the past 60 days, while the same for 2025 have remained constant at $1.44. BAYRY’s shares have lost 26.3% year to date.
Allogene Therapeutics’ loss estimates have remained constant at $1.41 per share for 2024 over the past 60 days, while that for 2025 has narrowed from $1.46 to $1.45 per share. ALLO’s shares have lost 15.3% year to date.
Allogene Therapeutics’ earnings beat estimates in three of the trailing four quarters and matched once, delivering an average surprise of 11.82%.
Novartis’ EPS estimates have risen from $7.48 to $7.56 per share for 2024 over the past 60 days, while that for 2025 has increased from $8.30 to $8.33. NVS’ shares have risen 8.3% year to date.
Novartis’ earnings beat estimates in three of the trailing four quarters and missed the same in one, delivering an average surprise of 2.22%.