Marginal Earnings Miss at Zoetis in Q3 - Analyst Blog

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Zoetis Inc. 's ( ZTS ) third quarter 2013 earnings (excluding special items) of 34 cents per share fell short of the Zacks Consensus Estimate by a penny. Third quarter 2013 earnings were 10% above the year-ago figure. Higher revenues aided results in the reported quarter.

Revenues at Zoetis climbed to $1.1 billion in the third quarter of 2013 from $1 billion recorded a year ago. Foreign currency movements adversely impacted revenues during the quarter by 1%. Revenues edged past the Zacks Consensus Estimate of $1.07 billion. We note that Zoetis is the former Animal Health business of Pfizer Inc . ( PFE ). Zoetis started trading on the New York Stock Exchange from Feb 1, 2013.

Zoetis boasts of a robust and diversified product portfolio. The product portfolio is divided into five categories - anti-infectives, vaccines, parasiticides, medicated feed additives and other pharmaceuticals for veterinarians and livestock producers.

Zoetis markets its offerings primarily across 8 species: cattle, swine, poultry, sheep and fish (livestock) and dogs, cats and horses (companion animals). In the third quarter of 2013, sales of livestock products accounted for 64% of total revenues. The balance came from the companion animal products.

Geographically, the company operates in four segments- the U.S, Europe/Africa/Middle East (EuAfME), Canada/Latin America (CLAR), and Asia/Pacific (APAC). Sales improved in the U.S. (10%), EuAfME (12%), CLAR (4%) and APAC (1%) markets. The growth rates are inclusive of foreign exchange impact.

2013 Outlook Modified

Zoetis updated its earlier provided guidance for 2013. The company now expects revenues in the range of $4.475-$4.525 billion (old guidance: $4.425 billion-$4.525 billion). The current Zacks Consensus Estimate stands at $4.48 billion. Zoetis narrowed its adjusted earnings guidance range for 2013 to $1.38-$1.42 per share from $1.36-$1.42 per share. The pre-earnings Zacks Consensus Estimate is $1.40 per share.

Zoetis currently carries a Zacks Rank #3 (Hold). Companies like Actelion Ltd. ( ALIOF ) and Isis Pharmaceuticals, Inc. ( ISIS ) appear to be well placed with a Zacks Rank #1 (Strong Buy).


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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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