Zoetis shares fall 8% despite Q3 profit beat and raised forecast
Adjusted EPS of $1.75 topped the $1.53 consensus estimate and revenue of $2.39 billion beat $2.33 billion. The company raised its 2026 adjusted EPS forecast to $6.25 to $6.35. Shares fell 8.0% at 3:59 p.m. ET.
Key takeaways
- Zoetis (ZTS) reported third-quarter adjusted earnings of $1.75 per share, topping the $1.53 consensus estimate, and revenue of $2.39 billion, above the $2.33 billion estimate. The company raised its 2026 adjusted EPS forecast to $6.25 to $6.35 per share.
Zoetis (ZTS) posted third-quarter adjusted diluted EPS of $1.75, topping the $1.53 consensus, and revenue of $2.39 billion, above the $2.33 billion consensus.
Shares fell 8.0% at 3:59 p.m. ET, from a $89.20 close.
Here's how the company did:
- Adjusted EPS: $1.75 vs. $1.53 expected, and $1.70 a year earlier
- Revenue: $2.39 billion vs. $2.33 billion expected, and $2.42 billion a year earlier
- GAAP diluted EPS: $1.44 vs. $1.63 a year earlier
Adjusted net income was $720 million, down 5%. GAAP net income was $591 million, down 18%.
Segment results
U.S. revenue fell 6% to $1.25 billion from $1.32 billion.
U.S. companion animal revenue decreased 8%, which the company tied to macro-driven price sensitivity, competition in dermatology and generic competition.
U.S. livestock revenue rose 5%, supported by cattle, swine and poultry.
International revenue rose 4% to $1.12 billion from $1.07 billion.
International livestock revenue rose 8% on a reported basis, driven by cattle and fish. International companion animal revenue rose 1%, led by parasiticides and osteoarthritis pain products.
In October, the FDA approved Convenia RTU for Dogs, a long-acting antibacterial injection for dogs, which the company expects to reach veterinarians in the first quarter of 2027.
2026 guidance
Zoetis narrowed its 2026 revenue forecast to $9.22 billion to $9.32 billion, from $9.12 billion to $9.32 billion.
It raised its adjusted net income forecast to $2.60 billion to $2.64 billion, from $2.57 billion to $2.62 billion.
The adjusted diluted EPS forecast rose to $6.25 to $6.35 per share, from $6.15 to $6.25.
Reported diluted EPS guidance is $5.50 to $5.60 per share, down from $5.55 to $5.65.
The company now expects about $210 million of certain items and acquisition and divestiture-related costs, up from about $150 million.
Costs and charges
Restructuring charges and certain acquisition and divestiture-related costs were $43 million, up from $4 million a year earlier.
The company recorded $89 million of impairment charges on in-process research and development assets acquired from PetMedix in 2023, following updated development and commercial assumptions.
Employee termination costs under a comprehensive cost and productivity program drove most of the restructuring charges.
The company excluded $133 million of pre-tax charges from its adjusted results.