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Zoetis (ZTS) to Report Q4 Earnings: What's in the Cards?

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Zoetis Inc. ZTS is slated to report fourth-quarter 2019 results on Feb 13, before market open.

The company has an excellent earnings surprise history, surpassing expectations in the trailing four quarters by 7.34%, on average. In the last reported quarter, the company delivered a positive surprise of 5.62%.

Zoetis’ share price has soared 61% in the past year against the industry’s decline of 0.4%.

 Let's see how things are shaping up for this announcement.

Factors to Consider

Zoetis derives majority of revenues from a diversified product portfolio of medicines and vaccines used to treat and protect livestock and companion animals. The company reports results under two geographical operating segments — the United States and International.

Solid sales from the dermatology portfolio and the Abaxis acquisition strengthened the United States segment in the third quarter, a trend that most likely continued in the fourth quarter. The company’s companion animal business has been performing well too.

ProHeart, Revolution and Simparica franchises, including product introductions like Revolution Plus for cats and ProHeart 12 for dogs, continue to drive growth in the companion animal portfolio. Key dermatology products like Apoquel and Cytopoint remain on track to achieve more than $700 million in sales for 2019.

The livestock portfolio declined in China due to swine declines, partially offset by growth in poultry and cattle. The company expects the impact of the African swine fever on 2019 revenues to be approximately $50 million, thereby affecting its fourth-quarter performance as well. 

Key Pipeline Updates

In the second quarter, the company initiated the filing process in the EU and the United States for a new fee line monoclonal antibody candidate to treat osteoarthritis pain in cats and another initiated in the third quarter to treat osteoarthritis pain in dogs. We expect the company to provide an update on the same during the fourth-quarter earnings call.

In November, the company acquired ZNLabs, a full-service veterinary clinical reference laboratory company with a network of labs across the United States. The addition of ZNLabs strengthens the company’s portfolio, expands its diagnostics footprint and enhances its value proposition to veterinary customers.

We expect the company to provide updates on these acquisitions in the fourth quarter.

What Our Model Indicates

Our proven model does not conclusively predict an earnings beat for Zoetis this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here, as you will see below.

Earnings ESP: Zoetis has an Earnings ESP of 0.00%, as both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at 88 cents. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #4 (Sell).


Zoetis Inc. Price and EPS Surprise


Zoetis Inc. Price and EPS Surprise

Zoetis Inc. price-eps-surprise | Zoetis Inc. Quote

Stocks That Warrant a Look

Here are some stocks you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this quarter.

Nektar Therapeutics (NKTR - Free Report) has an Earnings ESP of +8.36% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Eyenovia, Inc. EYEN has an Earnings ESP of +2.04% and a Zacks Rank #3.

Ascendis Pharma A/S ASND has an Earnings ESP of +4.22% and a Zacks Rank of 3.

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