On Tuesday, Zoetis Inc ZTS stock is trading higher after the company reported better-than-expected second-quarter financial results and raised its 2024 guidance above estimates.
The animal health company reported second-quarter revenue of $2.36 billion, up 8% year-over-year on reported and 11% on an operational basis, beating the consensus of $2.31 billion.
“We achieved 12% revenue growth in the U.S. and 10% operational revenue growth internationally, with both our companion animal and livestock portfolios seeing impressive global operational growth, 12% and 9% respectively,” said Kristin Peck, CEO.
Revenue in the U.S. segment was $1.3 billion, up 12%.
Sales of companion animal products increased by 13%, driven by the company’s monoclonal antibody products for osteoarthritis (OA) pain, Librela for dogs, and Solensia for cats. Simparica Trio, the company’s flea, tick, and heartworm combination product also contributed to the growth.
Sales of livestock products increased 11% in the quarter.
Growth in cattle and swine products was driven primarily by a soft prior year comparison due to the timing of supply of ceftiofur.
Revenue in the International segment stood at $1.0 billion, rising by 4% on a reported basis and by 10% operationally in the quarter.
Adjusted net income for the second quarter of 2024 was $711 million, or $1.56 per diluted share, an increase of 9% and 11%, respectively, on a reported basis and 18% and 20%, respectively, on an operational basis, beating the consensus of $1.49.
Guidance: Zoetis raised its 2024 sales guidance to $9.1 billion to $9.25 billion, from its prior guidance of $9.05 billion to $9.2 billion and the consensus of $9.15 billion.
The company expects 2024 adjusted EPS of $5.78-$5.88 versus prior guidance of $5.71-$5.81 and the consensus of $5.77.
William Blair writes, “In sum, Zoetis continues to benefit from the breadth of its portfolio innovation, and we think this momentum should continue through 2024-plus aided by some key areas like companion animal pain therapy, dermatology, and parasiticides.” The analyst maintains the Outperform rating.
William Blair adds companion animal operations grew by 12% despite an 11% comparison and ongoing macroeconomic concerns. This performance should instill confidence in the business’s trajectory through 2024 and beyond.
Price Action: ZTS stock is up 5.82% at $185.01 at the last check on Tuesday.
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