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Zoetis (ZTS) Down 6.5% Since Last Earnings Report: Can It Rebound?
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A month has gone by since the last earnings report for Zoetis (ZTS - Free Report) . Shares have lost about 6.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Zoetis due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Zoetis’ Q4 Earnings in Line With Estimates, Revenues Beat
Zoetis Inc. posted fourth-quarter 2022 adjusted earnings (excluding one-time items) of $1.15, which was in line with the Zacks Consensus Estimate. In the year-ago quarter, the company reported earnings of $1.00.
Total revenues grew 4% year over year to $2.04 billion, which beat the Zacks Consensus Estimate of $2.01 billion.
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 7% year over year to $1.11 billion for the fourth quarter. Sales of companion animal products in this region grew 12% from the prior-year quarter, primarily driven by higher sales of Simparica Trio, the triple-combination parasiticide for dogs. The Apoquel and Cytopoint brands in the dermatology portfolio also contributed to this increase. However, sales of livestock products decreased 6% year over year for the quarter due to a decrease in cattle product sales as a result of supply re-stocking in the third quarter of 2022 and generic competition for Draxxin.
Sales of swine products declined year over year. Also, sales of poultry products declined for the quarter due to the expanded use of lower-cost alternatives of premium products in addition to generic competition.
Revenues in the International segment were flat on a reported basis but increased 12% year over year on an operational basis to $901 million. Sales of companion animal products grew 7% on a reported and 21% on an operational basis. On a year-over-year basis, livestock product sales declined 7% on a reported basis and increased 4% operationally. While sales of poultry products increased because of market expansion in several key geographies, sales of swine products declined due to supply constraints.
The growth resulted from increased sales of Zoetis’ parasiticides portfolio, including the Simparica and Revolution franchises, the key dermatology portfolio consisting of both Apoquel and Cytopoint brands as well as the recently launched chewable version of Apoquel. The company’s monoclonal antibody products for osteoarthritis pain, Librela for dogs and Solensiafor cats, also contributed to growth in the reported quarter. Growth of the company’s fish portfolio was driven primarily by increased sales of vaccines across key salmon markets, including Norway and Chile.
Full-Year 2022 Results
Zoetis posted 2022 adjusted earnings of $4.88 per share (excluding one-time items), which increased from the year-ago figure of $4.70 and beat the Zacks Consensus Estimate of $4.87.
Total revenues grew 4% year over year to $8.1 billion, which beat the Zacks Consensus Estimate of $8.05 billion.
2023 Guidance
Zoetis issued its guidance for 2023.
The company expects adjusted earnings in the range of $5.34-$5.44 per share.
Revenues are projected between $8.575 billion and $8.725 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Zoetis has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Zoetis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Zoetis is part of the Zacks Medical - Drugs industry. Over the past month, Catalent (CTLT - Free Report) , a stock from the same industry, has gained 1.1%. The company reported its results for the quarter ended December 2022 more than a month ago.
Catalent reported revenues of $1.15 billion in the last reported quarter, representing a year-over-year change of -5.6%. EPS of $0.67 for the same period compares with $0.90 a year ago.
Catalent is expected to post earnings of $0.72 per share for the current quarter, representing a year-over-year change of -30.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -6.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Catalent. Also, the stock has a VGM Score of F.
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Zoetis (ZTS) Down 6.5% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Zoetis (ZTS - Free Report) . Shares have lost about 6.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Zoetis due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.
Zoetis’ Q4 Earnings in Line With Estimates, Revenues Beat
Zoetis Inc. posted fourth-quarter 2022 adjusted earnings (excluding one-time items) of $1.15, which was in line with the Zacks Consensus Estimate. In the year-ago quarter, the company reported earnings of $1.00.
Total revenues grew 4% year over year to $2.04 billion, which beat the Zacks Consensus Estimate of $2.01 billion.
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 7% year over year to $1.11 billion for the fourth quarter. Sales of companion animal products in this region grew 12% from the prior-year quarter, primarily driven by higher sales of Simparica Trio, the triple-combination parasiticide for dogs. The Apoquel and Cytopoint brands in the dermatology portfolio also contributed to this increase. However, sales of livestock products decreased 6% year over year for the quarter due to a decrease in cattle product sales as a result of supply re-stocking in the third quarter of 2022 and generic competition for Draxxin.
Sales of swine products declined year over year. Also, sales of poultry products declined for the quarter due to the expanded use of lower-cost alternatives of premium products in addition to generic competition.
Revenues in the International segment were flat on a reported basis but increased 12% year over year on an operational basis to $901 million. Sales of companion animal products grew 7% on a reported and 21% on an operational basis. On a year-over-year basis, livestock product sales declined 7% on a reported basis and increased 4% operationally. While sales of poultry products increased because of market expansion in several key geographies, sales of swine products declined due to supply constraints.
The growth resulted from increased sales of Zoetis’ parasiticides portfolio, including the Simparica and Revolution franchises, the key dermatology portfolio consisting of both Apoquel and Cytopoint brands as well as the recently launched chewable version of Apoquel. The company’s monoclonal antibody products for osteoarthritis pain, Librela for dogs and Solensiafor cats, also contributed to growth in the reported quarter. Growth of the company’s fish portfolio was driven primarily by increased sales of vaccines across key salmon markets, including Norway and Chile.
Full-Year 2022 Results
Zoetis posted 2022 adjusted earnings of $4.88 per share (excluding one-time items), which increased from the year-ago figure of $4.70 and beat the Zacks Consensus Estimate of $4.87.
Total revenues grew 4% year over year to $8.1 billion, which beat the Zacks Consensus Estimate of $8.05 billion.
2023 Guidance
Zoetis issued its guidance for 2023.
The company expects adjusted earnings in the range of $5.34-$5.44 per share.
Revenues are projected between $8.575 billion and $8.725 billion.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
VGM Scores
At this time, Zoetis has an average Growth Score of C, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Zoetis has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Zoetis is part of the Zacks Medical - Drugs industry. Over the past month, Catalent (CTLT - Free Report) , a stock from the same industry, has gained 1.1%. The company reported its results for the quarter ended December 2022 more than a month ago.
Catalent reported revenues of $1.15 billion in the last reported quarter, representing a year-over-year change of -5.6%. EPS of $0.67 for the same period compares with $0.90 a year ago.
Catalent is expected to post earnings of $0.72 per share for the current quarter, representing a year-over-year change of -30.8%. Over the last 30 days, the Zacks Consensus Estimate has changed -6.4%.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Catalent. Also, the stock has a VGM Score of F.