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Why Is Zoetis (ZTS) Up 1.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for Zoetis (ZTS - Free Report) . Shares have added about 1.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Zoetis due for a pullback? 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 Q2 Earnings & Revenues Beat, ’24 Outlook Raised
Zoetisdelivered 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.
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, 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Zoetis has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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, Ionis Pharmaceuticals (IONS - Free Report) , a stock from the same industry, has gained 1.8%. The company reported its results for the quarter ended June 2024 more than a month ago.
Ionis Pharmaceuticals reported revenues of $225 million in the last reported quarter, representing a year-over-year change of +19.7%. EPS of -$0.45 for the same period compares with -$0.60 a year ago.
For the current quarter, Ionis Pharmaceuticals is expected to post a loss of $1.17 per share, indicating a change of -13.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Ionis Pharmaceuticals. Also, the stock has a VGM Score of F.
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Why Is Zoetis (ZTS) Up 1.4% Since Last Earnings Report?
It has been about a month since the last earnings report for Zoetis (ZTS - Free Report) . Shares have added about 1.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Zoetis due for a pullback? 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 Q2 Earnings & Revenues Beat, ’24 Outlook Raised
Zoetisdelivered 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.
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, 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.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in fresh estimates.
VGM Scores
At this time, Zoetis has a subpar Growth Score of D, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. 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, Ionis Pharmaceuticals (IONS - Free Report) , a stock from the same industry, has gained 1.8%. The company reported its results for the quarter ended June 2024 more than a month ago.
Ionis Pharmaceuticals reported revenues of $225 million in the last reported quarter, representing a year-over-year change of +19.7%. EPS of -$0.45 for the same period compares with -$0.60 a year ago.
For the current quarter, Ionis Pharmaceuticals is expected to post a loss of $1.17 per share, indicating a change of -13.6% from the year-ago quarter. The Zacks Consensus Estimate has changed -0.1% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Ionis Pharmaceuticals. Also, the stock has a VGM Score of F.