Company Reports

Zoetis reported second-quarter results with flat top-line growth and earnings down 5% year over year, driven by an 11% decline in US companion animal revenue. Zoetis significantly reduced revenue guidance by 550 basis points at the midpoint and earnings per share by $0.82 at the midpoint.

Zoetis is the undisputed leader in the global animal health industry, and we believe it possesses the widest moat of all the competitors. Zoetis has set itself apart based on the impressive innovation that shows up across its product portfolio, including a number of drugs for specific pet ailments such as separation anxiety. The firm has also sought to expand its presence into virtually every type of animal-related health market, including aquaculture and pet diagnostics.

Rival Elanco recently made impressive inroads with corporate clients that suggested stronger-than-expected conversion to its new products, which weighed on Zoetis' 4% operational decline in first-quarter companion animal revenue.

Zoetis is the undisputed leader in the global animal health industry, and we believe it possesses the widest moat of all the competitors. Zoetis has set itself apart based on the impressive innovation that shows up across its product portfolio, including a number of drugs for specific pet ailments such as separation anxiety. The firm has also sought to expand its presence into virtually every type of animal-related health market, including aquaculture and pet diagnostics.

Zoetis reported first-quarter revenue of $2.26 billion and adjusted net income of $646 million, which translated into flat organic operational and 1% growth year over year, respectively. Management lowered its 2026 guidance and widened the range on revenue and earnings.

Zoetis is the undisputed leader in the global animal health industry, and we believe it possesses the widest moat of all the competitors. Zoetis has set itself apart based on the impressive innovation that shows up across its product portfolio, including a number of drugs for specific pet ailments such as separation anxiety. The firm has also sought to expand its presence into virtually every type of animal-related health market, including aquaculture and pet diagnostics.

Zoetis posted fourth-quarter organic operational revenue growth of 4%, and full-year earnings growth of 7%. In 2025, organic operational companion animal and livestock revenue were up 5% and 8%, respectively.

In the third quarter, Zoetis reported top-line growth of 1% and net income growth of 6%. US Librela sales declined 26% year over year, driving the shares down 13% in Nov. 4 trading.

Zoetis is the undisputed leader in the global animal health industry, and we believe it possesses the widest moat of all the competitors. Zoetis has set itself apart based on the impressive innovation that shows up across its product portfolio, including a number of drugs for specific pet ailments such as separation anxiety. The firm has also sought to expand its presence into virtually every type of animal-related health market, including aquaculture and pet diagnostics.

Zoetis reported second-quarter results that included reported revenue and earnings growth of 4% and 15%, respectively. Adjusted for the sale of the medicated feed additives and foreign currency, quarterly sales grew 8% year over year.

Zoetis delivered first-quarter adjusted top-line and bottom-line growth of 9% and 6%, respectively, as international revenue increased strongly at 11% year over year.

Zoetis delivered fourth-quarter results that were consistent with previous quarters, with 6% operational revenue growth and 8% sales growth from the companion animal segment.

Zoetis is the undisputed leader in the global animal health industry, and we believe it possesses the widest moat of all the competitors. Zoetis has set itself apart based on its impressive innovation that shows up across its product portfolio, including a number of drugs for specific pet ailments such as separation anxiety. The firm has also sought to expand its presence into virtually every type of animal-related health market, including aquaculture and pet diagnostics.

Zoetis's third-quarter results rested on stellar growth of US companion animal revenue of 18%, coupled with international pet sales growth of 11% in constant currency.

Zoetis is the undisputed leader in the global animal health industry, and we believe it possesses the widest moat of all the competitors. Zoetis has set itself apart based on its impressive innovation that shows up across its product portfolio, including a number of drugs for specific pet ailments such as separation anxiety. The firm has also sought to expand its presence into virtually every type of animal-related health market, including aquaculture and pet diagnostics.

Zoetis is the undisputed leader in the global animal health industry, and we believe it possesses the widest moat of all the competitors. Zoetis has set itself apart based on its impressive innovation that shows up across its product portfolio, including a number of drugs for specific pet ailments such as separation anxiety. The firm has also sought to expand its presence into virtually every type of animal-related health market, including aquaculture and pet diagnostics.

Zoetis posted a second-quarter performance that reflected ongoing strength in its companion-animal business. Though we’ve slightly adjusted our assumptions for the full year to reflect incrementally lower manufacturing, and sales and marketing expense, this wasn’t enough to materially move our fair value estimate. Another quarter of strength from Zoetis underscores the firm’s wide economic moat, in our view. The company’s novel companion-animal products have translated into robust adoption cycles that can be maintained over years. For example, its US dermatology franchise grew 17% in the quarter, though Apoquel and Cytopoint have been on the market since 2013 and 2016, respectively. Zoetis has deftly managed product life cycles with the introduction of chewable Apoquel last year, just ahead of the anticipated launch of Elanco’s competitive Zenrelia therapy in 2024. As it happens, Zenrelia is likely to be launched with a black box warning in late 2024, which, we think, should keep vets in the Apoquel camp.

Zoetis is the undisputed leader in the global animal health industry, and we believe it possesses the widest moat of all the competitors. Zoetis has set itself apart based on its impressive innovation that shows up across its product portfolio, including a number of drugs for specific pet ailments such as separation anxiety. The firm has also sought to expand its presence into virtually every type of animal-related health market, including aquaculture and pet diagnostics.

As we’d anticipated, Zoetis saw a strong start to 2024, fueled by its companion animal franchises. While management revised its outlook for the full year, our estimates remain within that range, and we’re holding firm on our fair value estimate. Not surprisingly, Librela for canine osteoarthritis got off to a fast start in the US, racking up $40 million in revenue for the first quarter. Despite a Wall Street Journal article last month that raised issues about Librela and potential adverse effects, we have yet to see diminished appetite by veterinarians for this therapy. Management indicated that US reorder rates have approached 80%, which we interpret as strong interest and potentially positive experiences by vets. At this point, we’re inclined to view reports of adverse effects as uncommon events. The wild success of Librela thus far and the impressive penetration of Solensia for osteoarthritis in cats underscore the strength of Zoetis’ wide economic moat, from our perspective. Zoetis has materially enlarged its footprint in large-molecule therapies for companion animals, leaving its main competitors in the dust.

Wide-moat Zoetis delivered fourth-quarter and full-year results that met our expectations on the top line and slightly exceeded our bottom-line projections. After minor adjustments to our model that were immaterial, we’re holding steady on our fair value estimate. Quarterly operational revenue growth of 8% offered a strong finish to 2023 where operational sales grew 7%. In particular, the companion animal segment grew 10% on an operational basis in the fourth quarter—outpacing the market. Further, quarterly livestock revenue increased 6% off a relatively soft prior-year period, which added some topspin.