Zoetis (ZTS) came out with quarterly earnings of $1.24 per share, missing the Zacks Consensus Estimate of $1.33 per share. This compares to earnings of $1.15 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -6.77%. A quarter ago, it was expected that this animal health company would post earnings of $1.35 per share when it actually produced earnings of $1.36, delivering a surprise of 0.74%.Over the last four quarters, the compa ...

Revenue Breakdown by Product and Region - 2023 revenue in the United States was $4,555 million, with 77% from companion animal products and 23% from livestock products[9] - Total international revenue for 2023 was $3,911 million, with 52% from companion animal products and 48% from livestock products[9] - Companion animal products represented approximately 65% of the company's total revenue for the year ended December 31, 2023[11] - Livestock products accounted for approximately 34% of the company's total revenue for the year ended December 31, 2023[11] - International operations accounted for 46% of total revenue in 2023, with emerging markets contributing 21%[16] - Revenue from companion animal products in the U.S. reached $3.529 billion in 2023, up from $3.341 billion in 2022 and $2.990 billion in 2021[266] - International companion animal revenue grew to $2.047 billion in 2023, compared to $1.862 billion in 2022 and $1.699 billion in 2021[266] - The U.S. remains the largest market, contributing $4.555 billion in revenue for 2023, up from $4.313 billion in 2022[265] - Parasiticides generated $1.947 billion in revenue in 2023, representing a significant portion of the company's product portfolio[269] - Vaccines contributed $1.771 billion to total revenue in 2023, showing steady growth from previous years[269] Product Portfolio and Innovation - The company has approximately 300 comprehensive product lines, including products for both companion animals and livestock[11] - The company launched Librela™ (bedinvetmab), the first injectable mAb therapy for monthly alleviation of osteoarthritis pain in dogs, approved in the EU in 2020 and in the U.S. in 2023[11] - The company acquired Jurox in 2022, expanding its range of companion animal and livestock products and increasing manufacturing capacity in Australia[12] - The company added AI dermatology and AI fecal for equine to the Vetscan Imagyst platform in 2023, enhancing diagnostic capabilities[12] - The company completed the acquisition of Basepaws in 2022, a petcare genetics company providing genetic tests and early health risk assessments[12] - The company's Pharmaq business is the global leader in vaccines and innovation for aquatic health products, with leading products like Alpha Ject and Alpha Flux[12] - The company completed the acquisition of PetMedix Ltd and adivo GmbH in 2023, both R&D stage animal health biopharmaceutical companies[13] - The company's product portfolio includes parasiticides, vaccines, dermatology products, anti-infectives, and animal health diagnostics[262] Financial Performance - Revenue for 2023 increased to $8.544 billion, up from $8.080 billion in 2022 and $7.776 billion in 2021[224] - Net income attributable to Zoetis Inc. for 2023 was $2.344 billion, compared to $2.114 billion in 2022 and $2.037 billion in 2021[224] - Earnings per share (diluted) for 2023 were $5.07, up from $4.49 in 2022 and $4.27 in 2021[224] - Research and development expenses increased to $614 million in 2023, compared to $539 million in 2022 and $508 million in 2021[224] - Dividends declared per common share increased to $1.557 in 2023, up from $1.350 in 2022 and $1.075 in 2021[224] - Net income before allocation to noncontrolling interests increased to $2,340 million in 2023, up from $2,111 million in 2022 and $2,034 million in 2021[226] - Comprehensive income attributable to Zoetis Inc. rose to $2,322 million in 2023, compared to $2,061 million in 2022 and $2,003 million in 2021[226] - Cash and cash equivalents decreased to $2,041 million in 2023 from $3,581 million in 2022[228] - Accounts receivable increased to $1,304 million in 2023 from $1,215 million in 2022[228] - Inventories grew to $2,564 million in 2023 from $2,345 million in 2022[228] - Total assets slightly decreased to $14,286 million in 2023 from $14,925 million in 2022[228] - Long-term debt, net of discount and issuance costs, remained stable at $6,564 million in 2023 compared to $6,552 million in 2022[228] - Retained earnings increased to $10,295 million in 2023 from $8,668 million in 2022[228] - Total equity rose to $4,991 million in 2023 from $4,403 million in 2022[228] - Treasury stock acquired in 2023 amounted to $1,102 million, with dividends declared at $716 million[230] - Net cash provided by operating activities rose to $2,353 million in 2023, compared to $1,912 million in 2022 and $2,213 million in 2021[232] - Capital expenditures increased to $732 million in 2023, up from $586 million in 2022 and $477 million in 2021[232] - Acquisitions, net of cash acquired, totaled $155 million in 2023, down from $312 million in 2022 and $14 million in 2021[232] - Cash dividends paid increased to $692 million in 2023, compared to $611 million in 2022 and $474 million in 2021[232] - Cash and cash equivalents at the end of 2023 decreased to $2,041 million, down from $3,581 million in 2022 and $3,485 million in 2021[232] Manufacturing and Supply Chain - The company has a global manufacturing network of 29 sites operated by itself[20] - The company's global manufacturing network consists of 109 CMOs as of December 31, 2023, supporting its supply chain[22] - The company owns the majority of its manufacturing sites, with 9 leased facilities and a portion of the Tullamore site in Ireland also leased[22] - A new manufacturing site was purchased outside Atlanta, Georgia in 2023, with plans for future commercial production[22] - The company operates a global manufacturing network with 29 sites across 12 countries and relies on 109 third-party CMOs[72] - Manufacturing challenges during COVID-19 impacted production of products like Simparica Trio, Librela, and Solensia, leading to purchase limits and delayed launches[72] Research and Development - The company incurred R&D expenses of $614 million in 2023, $539 million in 2022, and $508 million in 2021[19] - The company employed approximately 1,600 employees in global R&D operations as of December 31, 2023[19] - The company's R&D efforts may fail to generate new products or innovations, impacting future growth[75] - Delays in regulatory approvals or commercialization of new products could negatively affect revenue and earnings[76] - Animal testing regulations and negative publicity could impact R&D timelines and the company's reputation[77] Regulatory and Compliance - The company's regulatory compliance includes engagement with global agencies and adherence to U.S. FDA, USDA, and EPA regulations[25][26][27] - The company is subject to U.S. Foreign Corrupt Practices Act (FCPA) and foreign trade controls, including activities in Iran under OFAC regulations[27] - The company's product portfolio includes human medical devices regulated by the FDA, following the acquisition of Abaxis[26] - Regulatory scrutiny on animal health products and livestock operations is increasing, potentially requiring additional resources[48] - The company is subject to substantial global regulations, and non-compliance could result in fines, shutdowns, or product withdrawals[78] - Regulatory approvals are critical for marketing new products, and delays or failures in obtaining approvals could prevent the company from selling products in certain jurisdictions[79] - The company faces risks from economic sanctions, particularly in Russia and Iran, where it sells limited humanitarian animal health products[79] - Compliance with environmental, health, and safety laws could result in significant costs, including fines, penalties, and remediation expenses[79] - Climate change regulations, such as the EU's ESRS and California's Climate Corporate Data Accountability Act, may impose additional costs and disclosure obligations starting in 2026[79] - The company is subject to evolving chemical regulations, including restrictions on PFAS, with Maine banning products containing intentionally added PFAS by 2030[79] Competition and Market Risks - The company faces competition from major players like Boehringer Ingelheim, Merck Animal Health, Elanco, and IDEXX Laboratories, as well as generic products and startups[23] - The company faces increasing competition in the animal health industry, with potential impacts on revenue and profitability[53] - The company faces competition from generic alternatives, which may impact its market share[56] - Sales of Rimadyl chewable and Draxxin products declined by 33% and 47% respectively in the U.S. due to generic competition[57] - Global economic and political conditions, including COVID-19, Russia-Ukraine conflict, and inflation, could adversely affect the company's operating results and financial condition[58] - Consolidation of customers and distributors may lead to decreased product pricing and negatively impact financial performance[59] - Shift in distribution channels for companion animal products, particularly towards e-commerce, could reduce market share and margins[61] - Outbreaks of animal diseases like African Swine Fever and avian influenza could reduce demand for livestock products and impact sales[63] - Revenue from antibacterials for livestock was less than $950 million in 2023, with potential future declines due to regulatory restrictions and consumer preferences[64] - Adverse weather conditions and natural disasters could disrupt manufacturing and reduce demand for products[66] - Climate change may increase disease prevalence in livestock and disrupt supply chains, negatively impacting financial performance[67] - Changes in trade policies and tariffs, particularly involving the U.S. and China, could harm the company's business and financial condition[67] Intellectual Property and Patents - The company holds approximately 5,880 granted patents and 1,490 pending patent applications across more than 50 countries[24] - Key patent expirations include Draxxin (tulathromycin) in Japan and Brazil (2025), Excede/Naxcel (ceftiofur) in the U.S., Japan, and Brazil (2024-2027), and Cerenia injectable (2025-2028)[24] - The company maintains over 10,500 trademark applications and registrations globally for its animal health products[24] - The company's intellectual property rights are subject to challenges, which could allow competitors to take advantage of its research and development efforts[86] Employee and Diversity Initiatives - The company has approximately 14,100 employees worldwide, with 6,900 in the U.S. and 7,200 in other jurisdictions as of December 31, 2023[31] - The employee engagement rate was 86% in 2023, maintaining a high level in the high eighties for the last three years[32] - The company aims to increase the representation of women at the director level and above globally from 32% to 40% by the end of 2025[33] - The company aims to increase the overall representation of people of color in the U.S. from 21% to 25% by the end of 2025[33] - The company aims to increase the representation of Black colleagues in the U.S. from 4% to 5% by the end of 2025[33] - The company aims to increase the representation of Latinx colleagues in the U.S. from 5% to 6% by the end of 2025[33] - The global voluntary attrition rate decreased from 10% in 2022 to 8% in 2023[34] - The company tracks health and safety performance metrics including total injury rate (TIR) and lost time injury rate (LTIR), which are lower than industry averages[36] - The company has a leadership team with 64% of the executive team, including the CEO, being women[33] - The company offers nine Colleague Resource Groups to foster a diverse and inclusive environment[33] Environmental and Sustainability - Environmental-related capital expenditures in 2023 were approximately $15 million[48] - Other environmental-related expenditures in 2023 were approximately $19 million[48] - The company has indemnification obligations for environmental cleanups at sites it no longer owns or operates[48] - The company's future capital expenditures for environmental compliance and remediation are uncertain but not expected to have a material adverse effect[49] - Climate change regulations, such as the EU's ESRS and California's Climate Corporate Data Accountability Act, may impose additional costs and disclosure obligations starting in 2026[79] Legal and Litigation Risks - The company is subject to potential product liability claims and regulatory actions due to safety, quality, or efficacy concerns[55] - Litigation risks, including potential increases in liability for emotional distress claims related to companion animals, could materially impact financial results[80] - Counterfeit or illegally compounded versions of products, such as Apoquel and Simparica in Brazil, pose risks to the company's reputation and business[81] - Off-label use of products, such as Ketaset, could lead to increased liability and regulatory penalties[82] - Data privacy compliance is a significant challenge, with potential fines and penalties under laws like GDPR and CCPA[82] - ESG goals and disclosures, including the Driven to Care program, expose the company to reputational and operational risks[83] Financial Risks and Debt Management - The company has approximately $6.7 billion of total unsecured indebtedness outstanding as of December 31, 2023[92] - The company's high level of debt could limit its ability to obtain additional financing and increase its vulnerability to adverse economic conditions[92] - The company may face liquidity problems if cash flows and capital resources are insufficient to fund debt service obligations, potentially leading to reduced investments, asset disposals, or changes in dividend policy[93] - The company has a $1.0 billion senior unsecured revolving credit facility expiring in December 2027, with the option to increase it to $1.5 billion[292] - As of December 31, 2023, the company had $56 million in available lines of credit and $3 million in outstanding borrowings[292] - The company issued $1.35 billion in senior notes in November 2022, with $600 million due in 2025 and $750 million due in 2032[293] - Long-term debt as of December 31, 2023, totaled $6.564 billion, with a fair value of $6.319 billion[294] - Expected interest payments on long-term debt for 2024 are $272 million, with total interest payments of $3.166 billion over the life of the debt[295] - Interest expense, net of capitalized interest, was $239 million in 2023, compared to $221 million in 2022 and $224 million in 2021[296] Foreign Exchange and Interest Rate Risks - 43% of the company's revenue in 2023 was generated in currencies other than the U.S. dollar, primarily the euro, Brazilian real, Australian dollar, Chinese renminbi, British pound, and Canadian dollar[84] - The company faces risks from currency devaluations and cash repatriation restrictions, particularly in countries like China[84] - A 10% change in the U.S. dollar against other currencies would result in an $82 million change in cumulative translation adjustment (CTA) related to net investment hedges[202] - A 10% change in the U.S. dollar against other currencies would impact the fair value of foreign currency forward-exchange contracts by $11 million[202] - A 100-basis point increase in SOFR-based interest rates would increase annual interest expense by approximately $3 million due to fixed to floating interest rate swap agreements[203] - A 100-basis point increase or decrease in SOFR-based interest rates would change the fair value of forward-starting interest rate swaps by $6 million or $(7) million, respectively[203] - The company's primary net foreign currency translation exposures include the Australian dollar, Brazilian real, British pound, Canadian dollar, Chinese renminbi, and euro[202] - The company's debt is predominantly fixed-rate, with interest rate risk managed through interest rate swap agreements and forward-starting interest rate swaps[203] - The company's foreign exchange risk is managed through operational means and financial instruments, including foreign exchange derivative instruments and forward-exchange contracts[202] - The company uses derivative financial instruments to manage foreign exchange risk, primarily in the Australian dollar, British pound, Canadian dollar, Chinese renminbi, euro, and Norwegian krone[297] - Foreign currency forward-exchange contracts used for hedging typically mature within 60 days, with some extending up to 4 years[298] - The company entered into forward-starting interest rate swaps with an aggregate notional value of $650 million from 2019 to 2022 to hedge against interest rate exposure related to the issuance of fixed-rate debt[299] - Upon issuance of the 2022 senior notes, the company terminated these contracts and received $114 million in cash from the counterparties for settlement[299] - As of December 31, 2023, the company had outstanding forward-starting interest rate swaps with an effective date and mandatory termination date in March 2026 to hedge against interest rate exposure related to the anticipated future issuance of fixed-rate debt[299] - The aggregate notional amount of foreign currency forward-exchange contracts as of December 31, 2023, was $1,948 million, up from $1,753 million in 2022[300] - The fair value of forward-starting interest rate swap contracts as of December 31, 2023, was $12 million, compared to $10 million in 2022[301] - The company had $13 million of collateral received and $33 million posted related to derivative instruments as of December 31, 2023[301] - Net losses on foreign currency forward-exchange contracts not designated as hedging instruments were $25 million in 2023, down from $58 million in 2022[301] - The unrecognized net losses on foreign exchange derivative instruments, recorded net of tax in Accumulated other comprehensive loss, were $23 million in 2023, compared to a gain of $36 million in 2022[302] Tax and Accounting - The company recorded gross unrecognized tax benefits of $209 million as of December 31, 2023[211] - Rebate accruals for the U.S. segment included $301 million

In its upcoming report, Zoetis (ZTS) is predicted by Wall Street analysts to post quarterly earnings of $1.33 per share, reflecting an increase of 15.7% compared to the same period last year. Revenues are forecasted to be $2.19 billion, representing a year-over-year increase of 7.4%.Over the past 30 days, the consensus EPS estimate for the quarter has been adjusted downward by 1.6% to its current level. This demonstrates the covering analysts' collective reassessment of their initial projections during this ...

The market expects Zoetis (ZTS) to deliver a year-over-year increase in earnings on higher revenues when it reports results for the quarter ended December 2023. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on February 13, 2024, might help the stock move higher if these key numbers are b ...

Looking for a stock that has been consistently beating earnings estimates and might be well positioned to keep the streak alive in its next quarterly report? Zoetis (ZTS) , which belongs to the Zacks Medical - Drugs industry, could be a great candidate to consider.This animal health company has seen a nice streak of beating earnings estimates, especially when looking at the previous two reports. The average surprise for the last two quarters was 3.78%.For the last reported quarter, Zoetis came out with earn ...

PARSIPPANY, N.J.--(BUSINESS WIRE)--Zoetis Inc. (NYSE:ZTS) will host a webcast and conference call at 8:30 a.m. (ET) on Tuesday, Feb. 13, 2024. Chief Executive Officer Kristin Peck and Executive Vice President and Chief Financial Officer Wetteny Joseph will review fourth quarter and full year 2023 financial results and respond to questions from financial analysts during the call. Investors and the public may access the live webcast by visiting the Zoetis website at http://investor.zoetis.com/events-presenta ...

PARSIPPANY, N.J.--(BUSINESS WIRE)--Zoetis Inc. (NYSE:ZTS) will participate in the 42nd Annual J.P. Morgan Healthcare Conference on Monday, January 8, 2024. Kristin Peck, Chief Executive Officer, will represent the company and respond to questions from analysts. She is scheduled to present at 3:45 p.m. PT. Investors and other interested parties will be able to access a live audio webcast of the presentation by visiting http://investor.zoetis.com/events-presentations. A replay of the presentation will also b ...

Zoetis Inc. (NYSE:ZTS) Q3 2023 Earnings Conference Call November 1, 2023 8:30 AM ET Company Participants Steve Frank - VP of IR Kristin Peck - CEO Wetteny Joseph - CFO Conference Call Participants Jon Block - Stifel Erin Wright - Morgan Stanley Nathan Rich - Goldman Sachs David Westenberg - Piper Sandler Michael Ryskin - Bank of America Brandon Vazquez - William Blair Balaji Prasad - Barclays Chris Schott - J.P. Morgan Operator Welcome to the Third Quarter 2023 Financial Results Conference Call and Webcast ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to __________ Commission File Number:001-35797 Zoetis Inc. (Exact name of registrant as specified in its charter) Delaware 46-0696167 (State or ...

Financial Data and Key Metrics - Revenue for Q2 2023 was $2.2 billion, growing 6% on a reported basis and 9% operationally [15] - Adjusted net income for Q2 2023 was $652 million, growing 15% on a reported basis and 12% operationally [15] - Operational revenue growth was driven by 4% from price and 5% from volume, with volume growth consisting of 2% from in-line products, 2% from new products, and 1% from the dermatology portfolio [15] - Adjusted gross margin improved by 260 basis points to 72.4%, driven by favorable foreign exchange, price increases, and product mix [23] - Capital expenditures in Q2 were $166 million, and the company repurchased $324 million of shares [25] Business Line Performance - Companion animal portfolio grew 11% operationally in Q2, driven by dermatology, osteoarthritis pain, and pet parasiticides [6][16] - Livestock portfolio grew 4% operationally in Q2, driven by poultry, cattle, and fish products [6][17] - Companion animal diagnostics portfolio recorded $92 million in revenue, growing 12% operationally [17] - U.S. companion animal revenue grew 7%, with dermatology products contributing $241 million, growing 10% [18] - International companion animal revenue grew 17% operationally, driven by parasiticides, monoclonal antibodies for osteoarthritis pain, and dermatology products [20][21] Market Performance - U.S. revenue was $1.2 billion, growing 7%, with companion animal products growing 7% and livestock sales growing 5% [18] - International revenue was $1 billion, growing 6% on a reported basis and 11% operationally, with companion animal revenue growing 17% and livestock revenue growing 4% [20] - Strong growth in Europe, particularly in Northern Europe, with double-digit growth in companion animal products [63][64] Company Strategy and Industry Competition - The company is focused on innovation in chronic diseases, dermatology, parasiticides, and monoclonal antibodies for pain [6][12] - Direct-to-consumer campaigns are being used to support growth for products like Librela and Solensia [10] - The company received U.S. regulatory approvals for Librela and Apoquel Chewable in Q2 2023, with Librela expected to launch in the U.S. in November [11] - The company is expanding in large and growing product areas such as parasiticide, dermatology, monoclonal antibodies for pain, vaccines, and diagnostics [12] Management Commentary on Operating Environment and Future Outlook - The company expects full-year operational revenue growth of 6% to 8% and adjusted net income growth of 7% to 9% [9][25] - The company is monitoring macroeconomic conditions, particularly in Asia Pacific, and drought conditions in certain countries [11] - The company remains confident in its ability to deliver on its full-year guidance due to strong underlying demand for animal health products [81] Other Important Information - The company welcomed Ester Banque as EVP and President of U.S. Operations, bringing global healthcare experience [12] - The company published its 2022 sustainability report, highlighting progress in sustainability initiatives [13] - Zoetis was recognized by Fast Company as one of the Best Workplaces for Innovators [14] Q&A Session Summary Question: Impact of NexGard Plus on Simparica Trio - Simparica Trio has a superior label and first-mover advantage, with strong growth expected in Q3 and the second half of 2023 [32] - The company remains confident in competing against NexGard Plus due to the strength of its label and customer relationships [32] Question: Outlook for Companion Animal Growth - Companion animal growth is expected to improve in the second half of 2023, driven by strong demand and easier comparisons in the U.S. [38] - The company expects Q3 to be stronger than Q4 due to easier comps in companion animal and tougher comps in livestock [39] Question: Gross Margin Drivers and Sustainability - Gross margin improvement was driven by favorable foreign exchange, price increases, and product mix, with sustainability expected in the second half of 2023 [42][43] Question: Dermatology Market and Competition - The company expects double-digit growth in dermatology, driven by strong demand for Cytopoint and Apoquel Chewable [50][51] - The company is focused on life cycle innovation in dermatology, including long-acting monoclonal antibodies and new species applications [61][62] Question: EPS Guidance and Pricing Impact - The increase in EPS guidance is primarily due to favorable foreign exchange, with pricing increases typically occurring early in the year [57][58] Question: Global Parasiticide Market Growth - The company expects to grow faster than the global parasiticide market, driven by innovation and increased compliance [71][72][74] Question: U.S. Pet Health Market and Student Loan Repayments - Flat vet visits in the U.S. are due to workforce challenges rather than demand issues, with no significant impact expected from student loan repayments [77][79] Question: Long-Term Growth Commitment - The company remains committed to mid-to-high single-digit revenue growth over the next 3-5 years, driven by innovation and strong market demand [67][68]