Zoetis Inc (ZTS, Financial), a leading provider of animal health products, reported its financial results for the second quarter of 2024. The company, which sells anti-infectives, vaccines, parasiticides, diagnostics, and other health products for animals, earns roughly 35% of its revenue from production animals and nearly 65% from companion animal products.
Performance Overview
For the second quarter of 2024, Zoetis Inc (ZTS, Financial) reported revenue of $2.4 billion, marking an 8% increase compared to the same period in 2023. On an operational basis, revenue grew by 11%. However, net income decreased by 7% to $624 million, or $1.37 per diluted share, compared to the previous year.
Adjusted net income for the quarter was $711 million, or $1.56 per diluted share, reflecting increases of 9% and 11%, respectively, on a reported basis, and 18% and 20%, respectively, on an operational basis. These adjustments exclude the net impact of $87 million for purchase accounting adjustments, acquisition and divestiture-related costs, and certain significant items.
Segment Performance
Zoetis Inc (ZTS, Financial) organizes its operations into two segments: United States (U.S.) and International. In the U.S. segment, revenue increased by 12% to $1.3 billion, driven by strong sales of companion animal products, including monoclonal antibody (mAb) products for osteoarthritis pain, Simparica Trio®, and key dermatology products. Livestock product sales also saw an 11% increase.
Internationally, revenue grew by 4% on a reported basis and 10% operationally, reaching $1.0 billion. Companion animal product sales increased by 7% on a reported basis and 12% operationally, while livestock product sales were flat on a reported basis but grew by 8% operationally.
Financial Achievements and Guidance
Zoetis Inc (ZTS, Financial) raised its full-year 2024 revenue guidance to $9.100 - $9.250 billion, with diluted EPS of $5.35 to $5.45 on a reported basis, or $5.78 to $5.88 on an adjusted basis. The company also increased its full-year operational revenue growth forecast to 9% to 11% and operational growth in adjusted net income to 13.5% to 15.5%.
“We had another outstanding quarter, demonstrating the strong demand for our trusted, innovative products, our ability to capture and expand markets, and the dedication of our purpose-driven colleagues," said Kristin Peck, Chief Executive Officer of Zoetis.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 | % Change |
|---|---|---|---|
| Revenue | $2.4 billion | $2.2 billion | 8% |
| Net Income | $624 million | $671 million | -7% |
| Adjusted Net Income | $711 million | $652 million | 9% |
| Diluted EPS | $1.37 | $1.45 | -6% |
| Adjusted Diluted EPS | $1.56 | $1.41 | 11% |
Analysis
Zoetis Inc (ZTS, Financial) continues to demonstrate robust revenue growth, driven by strong demand for its companion animal products. However, the decline in net income highlights challenges that the company faces, including increased costs and expenses. The company's ability to raise its full-year guidance reflects confidence in its market position and growth strategy.
Investors should note the company's strategic investments in innovation and expansion, which are expected to drive future growth. The approval of new products and the anticipated launch of advanced diagnostic tools underscore Zoetis Inc (ZTS, Financial)'s commitment to maintaining its leadership in the animal health industry.
Explore the complete 8-K earnings release (here) from Zoetis Inc for further details.
