Zoetis, Inc. ZTS delivered second-quarter 2024 adjusted earnings (excluding one-time items) of $1.56 per share, which surpassed the Zacks Consensus Estimate of $1.49. In the year-ago quarter, the company delivered adjusted earnings of $1.41 per share.
Total revenues grew 8% year over year to $2.36 billion in the reported quarter, which also beat the Zacks Consensus Estimate of $2.30 billion. In the year-ago quarter, the company reported total revenues of $2.18 billion.
Shares of Zoetis are up in response to the better-than-expected results in the second quarter. The stock has plunged 11.4% in the year-to-date period compared with the industry’s 6% decline.
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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 12% year over year to $1.31 billion in the reported quarter, beating both the Zacks Consensus Estimate as well as our model estimate of $1.26 billion.
Sales of companion animal products in the U.S. region jumped 13% from the prior-year quarter’s level to $1.08 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 11% in the second quarter to $228 million, mainly driven by higher sales ofcattle and swine products due to favorable timing of supply of ceftiofur compared with the year-ago quarter.
Revenues in the International segment improved 4% year over year on a reported basis and 10% on an operational basis to $1.04 billion, beating both the Zacks Consensus Estimate and our model estimate of $1.02 billion.
Sales of companion animal products rose 7% on a reported basis and 12% 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 were flat on a reported basis but grew 8% operationally. Growth in both the cattle and poultry portfolios was driven largely by price increases across the broader international segment. Additionally, sales of fish products grew due to increased demand for vaccines in Norway.
2024 Guidance Raised
Zoetis now expects adjusted earnings in the range of $5.78-$5.88 per share in 2024 compared with the previous guidance of 5.71-$5.81 per share.
Revenues are projected between $9.10 billion and $9.25 billion, suggesting an operational growth of 9-11%. Total revenues were previously projected between $9.05 billion and $9.2 billion.
Zoetis Inc. Price and Consensus
Zoetis Inc. price-consensus-chart | Zoetis Inc. Quote
Our Take
Zoetis reports better-than-expected second-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.
Zacks Rank and Stocks to Consider
Zoetis currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the biotech sector are Annovis Bio ANVS, Anixa Biosciences ANIX and Akero Therapeutics AKRO, 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.
In the past 60 days, the Zacks Consensus Estimate for Annovis’ 2024 loss per share has remained constant at $2.46. During the same period, the consensus estimate for 2025 loss per share has narrowed from $1.95 to $1.91. Year to date, shares of ANVS have plunged 55%.
ANVS beat estimates in three of the trailing four quarters and missed once, delivering an average negative surprise of 1.39%.
In the past 60 days, the Zacks Consensus Estimate for Anixa Biosciences’ 2024 loss per share has narrowed from 44 cents to 43 cents. During the same time frame, the estimate for Anixa Biosciences’ 2025 loss per share has remained constant at 45 cents. Year to date, shares of ANIX have lost 20.1%.
ANIX beat estimates in three of the trailing four quarters and missed the mark once, delivering an average earnings surprise of 2.27%.
In the past 60 days, estimates for Akero Therapeutics’ 2024 loss per share have narrowed from $3.87 to $3.82. During the same period, loss per share estimates for 2025 have remained constant at $4.29. Year to date, shares of AKRO have gained 1.9%.
Akero’s earnings beat estimates in one of the trailing four quarters, missed twice and matched once, delivering an average negative surprise of 5.10%.
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