Zoetis Inc's 2025 Revenue Guidance Falls Short of Market
Zoetis Inc's Earnings Report Overview
Recently, Zoetis Inc reported its results for the fourth quarter of 2024. The adjusted earnings per share (EPS) came in at $1.40, showing a rise from $1.24 in the same quarter the previous year. This figure beat the consensus estimate, which was anticipated to be $1.34.
Financial Performance Highlights
In terms of adjusted net income for the fourth quarter, Zoetis showed a solid performance, reporting $632 million. This represents an 11% increase on a reported basis and a 9% increase on an operational basis. The total sales for the reported quarter were $2.32 billion, reflecting a 5% increase, which aligns with market expectations.
Revenue Growth Analysis
When considering operational growth, revenue increased by 6% compared to the same quarter of 2023. Notably, in October 2024, the company divested its medicated feed additive product portfolio and other associated products. After excluding the impacts from these divestments and foreign exchange variations, Zoetis reported a noteworthy organic operational growth rate of 9% for the fourth quarter and 12% for the entire fiscal year.
CEO's Insights on Revenue Growth
Kristin Peck, the chief executive officer of Zoetis, expressed pride in the accomplishments, stating, "We achieved 11% revenue growth in the U.S. and 10% operational revenue growth internationally. Our product portfolios for companion animals and livestock experienced substantial operational revenue growth, at 14% and 5%, respectively." This indicates a strong performance across key areas of their business.
2025 Guidance and Market Expectations
For the full fiscal year of 2025, Zoetis issued its revenue guidance, expecting revenues to fall between $9.225 billion and $9.375 billion. This operational growth is projected to be at 2% to 4%, with organic operational growth expected to be between 6% to 8%. However, this forecast is notably below the consensus market expectation of $9.574 billion.
Future Outlook and Management Statements
Peck mentioned, "As we approach 2025, we are eager to continue the momentum we realized in 2024. We are confident that the drivers of our success are sustainable, positioning us for continued above-market growth this year and beyond." The guidance indicates expectations of continued solid performance amidst a slightly lower revenue forecast.
Net Income and EPS Projections
In terms of net income, Zoetis is forecasting a reported net income of between $2.57 billion and $2.62 billion. Adjusted net income is projected to be between $2.700 billion and $2.750 billion, maintaining operational growth of 2% to 4% and organic operational growth of 6% to 8%. Furthermore, the anticipated EPS is projected within the range of $5.70 to $5.80, with adjusted EPS of $6.00 to $6.10 compared to a consensus estimate of $6.29.
Stock Performance Overview
Following these announcements, Zoetis's stock (ZTS) has taken a hit, dropping over 10%. At the last check, the stock was priced at $156.17, reflecting investor concerns over the weakened guidance for the upcoming year.
Frequently Asked Questions
What were Zoetis Inc's earnings for the fourth quarter of 2024?
Zoetis reported an adjusted EPS of $1.40, which exceeds the prior year's EPS of $1.24 and the consensus estimate of $1.34.
How did Zoetis' revenue perform in the fourth quarter?
The company reported sales of $2.32 billion for the fourth quarter, marking a 5% increase compared to the previous year and aligning with market expectations.
What is the guidance for Zoetis’ revenue in 2025?
Zoetis expects 2025 revenues to fall between $9.225 billion and $9.375 billion, which is below the consensus estimate of $9.574 billion.
What are the forecasts for adjusted net income?
The company projects adjusted net income to be between $2.700 billion and $2.750 billion for the coming year.
How did the stock react to the earnings report?
Following the earnings report and guidance announcement, Zoetis stock (ZTS) dropped 10%, trading at $156.17.
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