A month has gone by since the last earnings report for Zoetis (ZTS Quick QuoteZTS - Free Report) . Shares have added about 1% in that time frame, underperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Zoetis due for a pullback? 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 drivers.

Zoetis Q3 Earnings & Revenues Beat, ’24 Outlook Raised

Zoetisdelivered third-quarter 2024 adjusted earnings (excluding one-time items) of $1.58 per share, which surpassed the Zacks Consensus Estimate of $1.46. 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.

Zoetis’ 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, 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.

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.

Zoetis 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 expected between $9.2 billion and $9.3 billion, indicating operational growth of 10-11%. Total revenues were previously anticipated between $9.10 billion and $9.25 billion.

This can also be a reason for the upward movement of the stock price.

How Have Estimates Been Moving Since Then?

It turns out, estimates review have trended downward during the past month.

VGM Scores

Currently, Zoetis has a nice Growth Score of B, a grade with the same score on the momentum front. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of B. 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. Notably, Zoetis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

Performance of an Industry Player

Zoetis is part of the Zacks Medical - Drugs industry. Over the past month, Corcept Therapeutics (CORT Quick QuoteCORT - Free Report) , a stock from the same industry, has gained 14.4%. The company reported its results for the quarter ended September 2024 more than a month ago.

Corcept reported revenues of $182.55 million in the last reported quarter, representing a year-over-year change of +47.7%. EPS of $0.41 for the same period compares with $0.28 a year ago.

For the current quarter, Corcept is expected to post earnings of $0.37 per share, indicating a change of +32.1% from the year-ago quarter. The Zacks Consensus Estimate has changed +1.4% over the last 30 days.

Corcept has a Zacks Rank #2 (Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.