- Reports Revenue of $2.3 Billion, Growing 5%, and Net Income
of $581 Million, or $1.29 per Diluted Share, Increasing 11% and
13%, Respectively, on a Reported Basis for Fourth Quarter 2024
- Delivers 6% Operational Growth in Revenue and 9% Operational
Growth in Adjusted Net Income for Fourth Quarter 2024
- Delivers 9% Organic Operational Growth in Revenue for Fourth
Quarter 2024 After Accounting for the Divestiture of the Medicated
Feed Additive Product Portfolio, Certain Water Soluble Products and
Related Assets
- Reports Adjusted Net Income of $632 Million, or Adjusted
Diluted EPS of $1.40, for Fourth Quarter 2024
- Reports Revenue of $9.3 Billion, Growing 8%, and Net Income
of $2.5 Billion, or $5.47 per Diluted Share, Increasing 6% and 8%,
Respectively, on a Reported Basis for Full Year 2024
- Delivers 11% Operational Growth in Revenue and 15%
Operational Growth in Adjusted Net Income for Full Year
2024
- Reports Adjusted Net Income of $2.7 Billion, or Adjusted
Diluted EPS of $5.92 for Full Year 2024
- Provides Full Year 2025 Revenue Guidance of $9.225 - $9.375
Billion, with Diluted EPS of $5.70 to $5.80 on a Reported Basis, or
$6.00 to $6.10 on an Adjusted Basis
- Expects to Deliver 6% to 8% Organic Operational Growth in
Revenue
Zoetis Inc. (NYSE: ZTS) today reported its financial results for
the fourth quarter and full year 2024 as well as provided full year
guidance for 2025.
The company reported revenue of $2.3 billion for the fourth
quarter of 2024, an increase of 5% compared with the fourth quarter
of 2023. On an operational1 basis, revenue for the fourth quarter
of 2024 increased 6% compared with the fourth quarter of 2023. Net
income for the fourth quarter of 2024 was $581 million, or $1.29
per diluted share, an increase of 11% and 13%, respectively, on a
reported basis.
Adjusted net income2 for the fourth quarter of 2024 was $632
million, or $1.40 per diluted share, an increase of 11% and 13%,
respectively, on a reported basis, and an increase of 9% and 12%,
respectively, on an operational basis. Adjusted net income for the
fourth quarter of 2024 excludes the net impact of $51 million for
purchase accounting adjustments, acquisition and
divestiture-related costs, and certain significant items.
For full year 2024, the company reported revenue of $9.3
billion, an increase of 8% compared with full year 2023. On an
operational basis, revenue for full year 2024 increased 11%,
excluding the impact of foreign currency. Net income for full year
2024 was $2.5 billion, or $5.47 per diluted share, an increase of
6% and 8%, respectively, on a reported basis.
Adjusted net income for full year 2024 was $2.7 billion, or
$5.92 per diluted share, an increase of 10% and 11%, respectively,
on a reported basis, and 15% and 17%, respectively, on an
operational basis. Adjusted net income for full year 2024 excludes
the net impact of $207 million for purchase accounting adjustments,
acquisition and divestiture-related costs, and certain significant
items.
Organic Operational Growth3
As previously announced, on October 31, 2024, Zoetis completed
the divestiture of its medicated feed additive (MFA) product
portfolio, certain water soluble products and related assets. As a
result of this transaction, the company is providing organic
operational revenue growth, which excludes the impact of all
divested products as well as foreign exchange. For the fourth
quarter of 2024, the organic operational growth rate was 9%, and
for the full year 2024 the organic operational growth rate was 12%.
The company will continue to provide this metric in 2025 and has
included it in the financial guidance below.
EXECUTIVE COMMENTARY
“Zoetis delivered excellent full year results in 2024, driven by
the demand for our innovative products and the strength of our key
franchises,” said Kristin Peck, Chief Executive Officer of Zoetis.
“We achieved 11% revenue growth in the U.S. and 10% operational
revenue growth internationally, marking significant revenue
milestones, and our companion animal and livestock portfolios saw
strong operational revenue growth, 14% and 5%, respectively."
"As we approach 2025, we are eager to continue the momentum we
realized in 2024, and we are confident that the drivers of our
success are sustainable, positioning us for continued above-market
growth this year and beyond. We are guiding to full-year organic
operational growth of 6% to 8% in revenue in 2025," said Peck.
QUARTERLY HIGHLIGHTS
Zoetis organizes and manages its commercial operations across
two regional segments: United States (U.S.) and International.
Within these segments, the company delivers a diverse portfolio of
products for companion animals and livestock, tailored to local
trends and customer needs. In the fourth quarter of 2024:
- Revenue in the U.S. segment was $1.3
billion, an increase of 4% compared with the fourth quarter of
2023. Sales of companion animal products increased 7%, driven by
the company's flea, tick and heartworm combination product for
dogs, Simparica Trio®, as well as the key dermatology portfolio,
including Apoquel® and Cytopoint®. Also contributing to growth was
the company’s monoclonal antibody (mAb) products for osteoarthritis
(OA) pain, Librela® for dogs and Solensia® for cats. Growth in the
quarter was partially offset by the impact of initial stocking of
Librela and Apoquel Chewable products due to launches in the same
quarter of the prior year. Sales of livestock products declined 8%
in the quarter. The decline was a result of the divestiture of the
MFA product portfolio, certain water soluble products and related
assets, which more than offset growth in the ceftiofur and Draxxin®
lines of injectable antibiotic products.
- Revenue in the International segment
was $1.0 billion, reflecting a 6% increase on a reported basis and
an increase of 10% operationally compared with the fourth quarter
of 2023. Sales of companion animal products grew 11% on a reported
basis and 13% operationally. Growth in the quarter was driven by
the company’s key dermatology products, Apoquel and Cytopoint,
parasiticides products, Simparica® and Simparica Trio, as well as
the company's monoclonal antibody products for OA pain, Librela and
Solensia. Sales of livestock products were flat on a reported basis
and grew 6% operationally. Growth across the company's cattle and
poultry products was driven largely by price increases across the
broader international segment.
INVESTMENTS IN GROWTH
Zoetis continues to advance innovation and care for animals
across the globe with product approvals in new markets and
additional claim extensions. Since its last quarterly earnings
announcement, Revolution® Plus (selamectin/sarolaner), a
topical combination product that treats ticks, fleas, ear mites,
lice and gastrointestinal worms and prevents heartworm disease in
cats, received approval in Brazil. In the U.S. and Canada,
Revolution Plus received approval for an additional claim
related to the prevention of flea tapeworm infections by
controlling fleas.
Librela (bedinvetmab injection), the first injectable
monoclonal antibody for the alleviation of pain associated with
osteoarthritis in dogs, received approval in El Salvador and South
Korea. Simparica (sarolaner) and Simparica Trio
(sarolaner/moxidectin/pyrantel) received approval in the U.S. for a
claim related to the treatment and control of Asian longhorned tick
infestations (Haemaphysalis longicornis) in dogs.
In livestock, Synovex Choice® and Synovex® Primer™
received approval in the U.S. for an additional claim to increase
rate of weight gain in growing beef steers and heifers on pasture.
In the EU, Poulvac® IB Primer and Poulvac IB
QX received approval for an association claim that includes
cross protection against 793B and variant 2 strains of infectious
Bronchitis virus (IBV).
FINANCIAL GUIDANCE
Zoetis is providing full year 2025 guidance, which includes:
- Revenue between $9.225 billion to $9.375
billion (operational growth of 2% to 4%; organic operational growth
of 6% to 8%)
- Reported net income between $2.570 billion to
$2.620 billion
- Adjusted net income between $2.700 billion to
$2.750 billion (operational growth of 2% to 4%; organic operational
growth of 6% to 8%)
- Reported diluted EPS between $5.70 to
$5.80
- Adjusted diluted EPS between $6.00 to
$6.10
This guidance reflects foreign exchange rates as of late January
2025. Additional details on guidance are included in the financial
tables and will be discussed on the company's conference call this
morning.
WEBCAST & CONFERENCE CALL
DETAILS
Zoetis will host a webcast and conference call at 8:30 a.m. (ET)
today, during which company executives will review fourth quarter
and full year 2024 results, discuss financial guidance and respond
to questions from financial analysts. Investors and the public may
access the live webcast and corresponding slides by visiting the
Zoetis website at http://investor.zoetis.com/events-presentations.
A replay of the webcast will be archived and made available on
February 13, 2025.
About Zoetis
As the world’s leading animal health company, Zoetis is driven
by a singular purpose: to nurture our world and humankind by
advancing care for animals. After innovating ways to predict,
prevent, detect, and treat animal illness for more than 70 years,
Zoetis continues to stand by those raising and caring for animals
worldwide – from veterinarians and pet owners to livestock
producers. The company’s leading portfolio and pipeline of
medicines, vaccines, diagnostics and technologies make a difference
in over 100 countries. A Fortune 500 company, Zoetis generated
revenue of $9.3 billion in 2024 with approximately 13,800
employees. For more information, visit www.zoetis.com.
1 Operational results (a non-GAAP financial measure) is defined
as results excluding the impact of foreign exchange. 2 Adjusted net
income and its components and adjusted diluted earnings per share
(non-GAAP financial measures) are defined as reported net income
and reported diluted earnings per share, excluding purchase
accounting adjustments, acquisition and divestiture-related costs
and certain significant items. 3 Organic operational results (a
non-GAAP financial measure) excludes the impact of foreign exchange
and certain acquisitions and divestitures.
DISCLOSURE NOTICES
Forward-Looking Statements: This
press release contains forward-looking statements, which reflect
the current views of Zoetis with respect to: business plans or
prospects, future operating or financial performance, future
guidance, future operating models; R&D costs; timing and
likelihood of success; expectations regarding products, product
approvals or products under development and expected timing of
product launches; expectations regarding competing products;
expectations regarding financial impact of divestitures;
disruptions in our global supply chain; expectations regarding the
performance of acquired companies and our ability to integrate new
businesses; expectations regarding the financial impact of
acquisitions; future use of cash, dividend payments and share
repurchases; foreign exchange rates, tax rates and tax regimes and
any changes thereto; and other future events. These statements are
not guarantees of future performance or actions. Forward-looking
statements are subject to risks and uncertainties. If one or more
of these risks or uncertainties materialize, or if management's
underlying assumptions prove to be incorrect, actual results may
differ materially from those contemplated by a forward-looking
statement. Forward-looking statements speak only as of the date on
which they are made. Zoetis expressly disclaims any obligation to
update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise. A further list and
description of risks, uncertainties and other matters can be found
in our most recent Annual Report on Form 10-K, including in the
sections thereof captioned “Forward-Looking Statements and Factors
That May Affect Future Results” and “Item 1A. Risk Factors,” in our
Quarterly Reports on Form 10-Q and in our Current Reports on Form
8-K. These filings and subsequent filings are available online at
www.sec.gov, www.zoetis.com, or on request from Zoetis.
Use of Non-GAAP Financial Measures:
We use non-GAAP financial measures, such as adjusted net income,
adjusted diluted earnings per share, operational results (which
exclude the impact of foreign exchange) and organic operational
results (which exclude the impact of foreign exchange and certain
acquisitions and divestitures), to assess and analyze our results
and trends and to make financial and operational decisions. We
believe these non-GAAP financial measures are also useful to
investors because they provide greater transparency regarding our
operating performance. The non-GAAP financial measures included in
this press release should not be considered alternatives to
measurements required by GAAP, such as net income, operating
income, and earnings per share, and should not be considered
measures of liquidity. These non-GAAP financial measures are
unlikely to be comparable with non-GAAP information provided by
other companies. Reconciliations of non-GAAP financial measures and
the most directly comparable GAAP financial measures are included
in the tables accompanying this press release and are posted on our
website at www.zoetis.com.
Internet Posting of Information: We routinely post information
that may be important to investors on the 'Investor Relations'
section of our website at www.zoetis.com, as well as on LinkedIn,
Facebook, X (formerly Twitter) and YouTube. We encourage investors
and potential investors to consult our website regularly and to
follow us on social media for company news and information.
ZTS-COR ZTS-IR ZTS-FIN
ZOETIS INC.
CONDENSED CONSOLIDATED STATEMENTS
OF INCOME(a)
(UNAUDITED)
(millions of dollars, except per
share data)
Three Months Ended December
31,
% Change
Twelve Months Ended December
31,
% Change
2024
2023
2024
2023
Revenue
$
2,317
$
2,213
5
$
9,256
$
8,544
8
Costs and expenses:
Cost of sales
707
728
(3)
2,719
2,561
6
Selling, general and
administrative expenses
625
565
11
2,318
2,151
8
Research and development
expenses
186
174
7
686
614
12
Amortization of intangible
assets
34
37
(8)
141
149
(5)
Restructuring charges and certain
acquisition and divestiture-related costs
2
8
(75)
53
53
—
Interest expense
51
59
(14)
225
239
(6)
Other (income)/deductions–net
(20
)
(8
)
*
(19
)
(159
)
(88)
Income before provision for taxes
on income
732
650
13
3,133
2,936
7
Provision for taxes on income
151
127
19
637
596
7
Net income before allocation to
noncontrolling interests
581
523
11
2,496
2,340
7
Less: Net (loss)/income
attributable to noncontrolling interests
—
(2
)
*
10
(4
)
*
Net income attributable to
Zoetis
$
581
$
525
11
$
2,486
$
2,344
6
Earnings per share—basic
$
1.29
$
1.14
13
$
5.47
$
5.08
8
Earnings per share—diluted
$
1.29
$
1.14
13
$
5.47
$
5.07
8
Weighted-average shares used to
calculate earnings per share
Basic
450.5
459.0
454.2
461.2
Diluted
451.1
460.1
454.8
462.3
(a) The Condensed Consolidated
Statements of Income present the three and twelve months ended
December 31, 2024 and 2023. Subsidiaries operating outside the U.S.
are included for the three and twelve months ended November 30,
2024 and 2023.
* Calculation not meaningful.
ZOETIS INC.
RECONCILIATION OF GAAP REPORTED
TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
(UNAUDITED)
(millions of dollars, except per
share data)
Three Months Ended December 31,
2024
GAAP Reported(a)
Purchase Accounting
Adjustments
Acquisition and Divestiture-
Related Costs(1)
Certain Significant Items(2)
Non-GAAP Adjusted(b)
Cost of sales
$
707
$
(1
)
$
—
$
—
$
706
Gross profit
1,610
1
—
—
1,611
Selling, general and
administrative expenses
625
(2
)
—
(4
)
619
Amortization of intangible
assets
34
(30
)
—
—
4
Restructuring charges and certain
acquisition and divestiture-related costs
2
—
(6
)
4
—
Other (income)/deductions–net
(20
)
—
—
(2
)
(22
)
Income before provision for taxes
on income
732
33
6
2
773
Provision for taxes on income
151
7
1
(18
)
141
Net income attributable to
Zoetis
581
26
5
20
632
Earnings per common share
attributable to Zoetis–diluted
1.29
0.06
0.01
0.04
1.40
Three Months Ended December 31,
2023
GAAP Reported(a)
Purchase Accounting
Adjustments
Acquisition and Divestiture-
Related Costs(1)
Certain Significant Items(2)
Non-GAAP Adjusted(b)
Cost of sales
$
728
$
—
$
—
$
(1
)
$
727
Gross profit
1,485
—
—
1
1,486
Selling, general and
administrative expenses
565
(3
)
—
—
562
Amortization of intangible
assets
37
(32
)
—
—
5
Restructuring charges and certain
acquisition and divestiture-related costs
8
—
(1
)
(7
)
—
Other (income)/deductions–net
(8
)
—
—
(4
)
(12
)
Income before provision for taxes
on income
650
35
1
12
698
Provision for taxes on income
127
6
1
(3
)
131
Net income attributable to
Zoetis
525
29
—
15
569
Earnings per common share
attributable to Zoetis–diluted
1.14
0.07
—
0.03
1.24
(a) The Condensed Consolidated
Statements of Income present the three months ended December 31,
2024 and 2023. Subsidiaries operating outside the U.S. are included
for the three months ended November 30, 2024 and 2023.
(b) Non-GAAP adjusted net income
and its components and non-GAAP adjusted diluted EPS are not, and
should not be viewed as, substitutes for U.S. GAAP net income and
its components and diluted EPS. Despite the importance of these
measures to management in goal setting and performance measurement,
non-GAAP adjusted net income and its components and non-GAAP
adjusted diluted EPS are non-GAAP financial measures that have no
standardized meaning prescribed by U.S. GAAP and, therefore, have
limits in their usefulness to investors. Because of the
non-standardized definitions, non-GAAP adjusted net income and its
components and non-GAAP adjusted diluted EPS (unlike U.S. GAAP net
income and its components and diluted EPS) may not be comparable to
the calculation of similar measures of other companies. Non-GAAP
adjusted net income and its components, and non-GAAP adjusted
diluted EPS are presented solely to permit investors to more fully
understand how management assesses performance.
See Notes to Reconciliation of
GAAP Reported to Non-GAAP Adjusted Information for notes (1) and
(2).
ZOETIS INC.
RECONCILIATION OF GAAP REPORTED
TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
(UNAUDITED)
(millions of dollars, except per
share data)
Twelve Months Ended December 31,
2024
GAAP Reported(a)
Purchase Accounting
Adjustments
Acquisition and Divestiture-
Related Costs(1)
Certain Significant Items(2)
Non-GAAP Adjusted(b)
Cost of sales
$
2,719
$
(4
)
$
—
$
(1
)
$
2,714
Gross profit
6,537
4
—
1
6,542
Selling, general and
administrative expenses
2,318
(11
)
—
(6
)
2,301
Research and development
expenses
686
(2
)
—
—
684
Amortization of intangible
assets
141
(123
)
—
—
18
Restructuring charges and certain
acquisition and divestiture-related costs
53
—
(18
)
(35
)
—
Other (income)/deductions–net
(19
)
—
—
(37
)
(56
)
Income before provision for taxes
on income
3,133
140
18
79
3,370
Provision for taxes on income
637
31
4
(5
)
667
Net income attributable to
Zoetis
2,486
109
14
84
2,693
Earnings per common share
attributable to Zoetis–diluted
5.47
0.24
0.03
0.18
5.92
Twelve Months Ended December 31,
2023
GAAP Reported(a)
Purchase Accounting
Adjustments
Acquisition and Divestiture-
Related Costs(1)
Certain Significant Items(2)
Non-GAAP Adjusted(b)
Cost of sales
$
2,561
$
(10
)
$
—
$
(3
)
$
2,548
Gross profit
5,983
10
—
3
5,996
Selling, general and
administrative expenses
2,151
(21
)
—
—
2,130
Research and development
expenses
614
(1
)
—
—
613
Amortization of intangible
assets
149
(127
)
—
—
22
Restructuring charges and certain
acquisition and divestiture-related costs
53
—
(9
)
(44
)
—
Other (income)/deductions–net
(159
)
—
—
80
(79
)
Income before provision for taxes on
income
2,936
159
9
(33
)
3,071
Provision for taxes on income
596
32
2
(12
)
618
Net income attributable to
Zoetis
2,344
127
7
(21
)
2,457
Earnings per common share
attributable to Zoetis–diluted
5.07
0.28
0.02
(0.05
)
5.32
(a) The Condensed Consolidated
Statements of Income present the twelve months ended December 31,
2024 and 2023. Subsidiaries operating outside the U.S. are included
for the twelve months ended November 30, 2024 and 2023.
(b) Non-GAAP adjusted net income
and its components and non-GAAP adjusted diluted EPS are not, and
should not be viewed as, substitutes for U.S. GAAP net income and
its components and diluted EPS. Despite the importance of these
measures to management in goal setting and performance measurement,
non-GAAP adjusted net income and its components and non-GAAP
adjusted diluted EPS are non-GAAP financial measures that have no
standardized meaning prescribed by U.S. GAAP and, therefore, have
limits in their usefulness to investors. Because of the
non-standardized definitions, non-GAAP adjusted net income and its
components and non-GAAP adjusted diluted EPS (unlike U.S. GAAP net
income and its components and diluted EPS) may not be comparable to
the calculation of similar measures of other companies. Non-GAAP
adjusted net income and its components, and non-GAAP adjusted
diluted EPS are presented solely to permit investors to more fully
understand how management assesses performance.
See Notes to Reconciliation of
GAAP Reported to Non-GAAP Adjusted Information for notes (1) and
(2).
ZOETIS INC.
NOTES TO RECONCILIATION OF GAAP
REPORTED TO NON-GAAP ADJUSTED INFORMATION
CERTAIN LINE ITEMS
(UNAUDITED)
(millions of dollars)
(1) Acquisition and
divestiture-related costs include the following:
Three Months Ended December
31,
Twelve Months Ended December
31,
2024
2023
2024
2023
Acquisition-related costs(a)
$
—
$
—
$
1
$
7
Divestiture-related costs(b)
5
—
16
—
Restructuring charges(c)
1
1
1
2
Total acquisition and
divestiture-related costs—pre-tax
6
1
18
9
Income taxes(d)
1
1
4
2
Total acquisition and
divestiture-related costs—net of tax
$
5
$
—
$
14
$
7
(a) Acquisition-related costs
represent external, incremental costs that directly relate to
transacting and integrating businesses, included in Restructuring
charges and certain acquisition and divestiture-related costs.
(b) Divestiture-related costs
consisted of costs related to the sale of our medicated feed
additive product portfolio, certain water soluble products and
related assets, included in Restructuring charges and certain
acquisition and divestiture-related costs.
(c) Restructuring charges
represent employee termination costs directly related to
acquisitions and divestitures, included in Restructuring charges
and certain acquisition and divestiture-related costs.
(d) Included in Provision for
taxes on income. Income taxes include the tax effect of the
associated pre-tax amounts, calculated by determining the
jurisdictional location of the pre-tax amounts and applying that
jurisdiction's applicable tax rate.
(2) Certain significant items
include the following:
Three Months Ended December
31,
Twelve Months Ended December
31,
2024
2023
2024
2023
Other restructuring charges and
cost-reduction/productivity initiatives(a)
$
(4
)
$
8
$
35
$
44
Certain asset impairment
charges(b)
—
3
11
24
Net loss/(gain) on sale of
businesses(c)
3
—
25
(101
)
Other
3
1
8
—
Total certain significant
items—pre-tax
2
12
79
(33
)
Income taxes(d)
(18
)
(3
)
(5
)
(12
)
Total certain significant
items—net of tax
$
20
$
15
$
84
$
(21
)
(a) For the twelve months ended
December 31, 2024, primarily consisted of employee termination
costs related to organizational structure refinements, partially
offset by a reversal of certain employee termination costs as a
result of a change in strategy from our 2015 operational efficiency
initiative, included in Restructuring charges and certain
acquisition and divestiture-related costs.
For the three and twelve months
ended December 31, 2023, primarily represents employee termination
and exit costs associated with cost-reduction and productivity
initiatives in certain international markets, included in
Restructuring charges and certain acquisition and
divestiture-related costs, as well as product transfer costs,
included in Cost of sales.
(b) For the twelve months ended
December 31, 2024, represents certain asset impairment charges
related to our aquaculture business, included in Other
(income)/deductions–net.
For the twelve months ended
December 31, 2023, primarily represents certain asset impairment
charges related to our precision animal health and diagnostics
businesses, primarily included in Other
(income)/deductions–net.
(c) For the three and twelve
months ended December 31, 2024, represents a net loss related to
the sale of our medicated feed additive product portfolio, certain
water soluble products and related assets, included in Other
(income)/deductions–net.
For the twelve months ended
December 31, 2023, primarily represents a net gain on the sale of a
majority interest in our pet insurance business, included in Other
(income)/deductions–net.
(d) Included in Provision for
taxes on income. Income taxes include the tax effect of the
associated pre-tax amounts, calculated by determining the
jurisdictional location of the pre-tax amounts and applying that
jurisdiction's applicable tax rate. Income taxes in Certain
significant items also includes:
- For the twelve months ended
December 31, 2024, includes a tax expense related to the
divestiture of the medicated feed additive product portfolio,
certain water soluble products and related assets.
- For the three and twelve months
ended December 31, 2023, includes a tax expense related to changes
to prior years' tax positions with regard to the one-time mandatory
deemed repatriation tax under the Tax Cuts and Jobs Act. For the
twelve months ended December 31, 2023, also includes a benefit from
the tax loss on the divestiture of Performance Livestock
Analytics.
ZOETIS INC.
ADJUSTED SELECTED COSTS AND
EXPENSES(a)
(UNAUDITED)
(millions of dollars)
Three Months Ended December
31,
% Change
2024
2023
Total
Foreign Exchange
Operational(b)
Adjusted cost of sales
$
706
$
727
(3
)%
(6
)%
3
%
As a percent of revenue
30.5
%
32.9
%
NA
NA
NA
Adjusted SG&A expenses
619
562
10
%
(1
)%
11
%
Adjusted R&D expenses
186
174
7
%
—
%
7
%
Adjusted net income attributable to
Zoetis
632
569
11
%
2
%
9
%
Twelve Months Ended December
31,
% Change
2024
2023
Total
Foreign Exchange
Operational(b)
Adjusted cost of sales
$
2,714
$
2,548
7
%
(1
)%
8
%
As a percent of revenue
29.3
%
29.8
%
NA
NA
NA
Adjusted SG&A expenses
2,301
2,130
8
%
(1
)%
9
%
Adjusted R&D expenses
684
613
12
%
—
%
12
%
Adjusted net income attributable to
Zoetis
2,693
2,457
10
%
(5
)%
15
%
(a) Adjusted cost of sales, adjusted
selling, general, and administrative (SG&A) expenses, adjusted
research and development (R&D) expenses, and adjusted net
income (non-GAAP financial measures) are defined as the
corresponding reported U.S. GAAP income statement line items
excluding purchase accounting adjustments, acquisition and
divestiture-related costs, and certain significant items. These
adjusted income statement line item measures are not, and should
not be viewed as, substitutes for the corresponding U.S. GAAP line
items. The corresponding GAAP line items and reconciliations of
reported to adjusted information are provided in Condensed
Consolidated Statements of Income and Reconciliation of GAAP
Reported to Non-GAAP Adjusted Information.
(b) Operational results (a non-GAAP
financial measure) is defined as results excluding the impact of
foreign exchange.
ZOETIS INC.
2025 GUIDANCE
Selected Line Items
(millions of dollars, except per share
amounts)
Full Year 2025
Revenue
$9,225 to $9,375
Operational growth(a)
2% to 4%
Organic operational growth(b)
6% to 8%
Adjusted cost of sales as a percentage of
revenue(c)
Approximately 28.0%
Adjusted SG&A expenses(c)
$2,300 to $2,350
Adjusted R&D expenses(c)
$680 to $690
Adjusted interest expense and other
(income)/deductions-net(c)
Approximately $200
Effective tax rate on adjusted
income(c)
Approximately 21%
Adjusted diluted EPS(c)
$6.00 to $6.10
Adjusted net income(c)
$2,700 to $2,750
Operational growth(a)(d)
2% to 4%
Organic operational growth(b)(d)
6% to 8%
Certain significant items and acquisition
and divestiture-related costs(e)
Approximately $30
The guidance reflects foreign exchange
rates as of late January 2025.
Reconciliations of 2025 reported guidance
to 2025 adjusted guidance follows:
(millions of dollars, except per share
amounts)
Reported
Certain significant items and
acquisition and divestiture-related costs(d)
Purchase accounting
Adjusted(b)
Cost of sales as a percentage of
revenue
~ 28.2%
~ (0.1%)
~ (0.1%)
~ 28.0%
SG&A expenses
$2,325 to $2,375
~ $(15)
~ $(10)
$2,300 to $2,350
R&D expenses
$682 to $692
~ $(2)
$680 to $690
Interest expense and other
(income)/deductions
~ $200
~ $200
Effective tax rate
~ 21%
~ 21%
Diluted EPS
$5.70 to $5.80
~ $0.07
~ $0.23
$6.00 to $6.10
Net income attributable to Zoetis
$2,570 to $2,620
~ $30
~ $100
$2,700 to $2,750
(a) Operational results (a non-GAAP
financial measure) excludes the impact of foreign exchange.
(b) Organic operational results (a
non-GAAP financial measure) excludes the impact of foreign exchange
and certain acquisitions and divestitures.
(c) Adjusted net income and its components
and adjusted diluted EPS are defined as reported U.S. GAAP net
income and its components and reported diluted EPS excluding
purchase accounting adjustments, acquisition and
divestiture-related costs and certain significant items. Adjusted
cost of sales, adjusted SG&A expenses, adjusted R&D
expenses, and adjusted interest expense and other
(income)/deductions-net are income statement line items prepared on
the same basis, and, therefore, components of the overall adjusted
income measure. Despite the importance of these measures to
management in goal setting and performance measurement, adjusted
net income and its components and adjusted diluted EPS are non-GAAP
financial measures that have no standardized meaning prescribed by
U.S. GAAP and, therefore, have limits in their usefulness to
investors. Because of the non-standardized definitions, adjusted
net income and its components and adjusted diluted EPS (unlike U.S.
GAAP net income and its components and diluted EPS) may not be
comparable to the calculation of similar measures of other
companies. Adjusted net income and its components and adjusted
diluted EPS are presented solely to permit investors to more fully
understand how management assesses performance. Adjusted net income
and its components and adjusted diluted EPS are not, and should not
be viewed as, substitutes for U.S. GAAP net income and its
components and diluted EPS.
(d) We do not provide a reconciliation of
forward-looking non-GAAP adjusted net income operational growth or
organic operational growth to the most directly comparable U.S.
GAAP reported financial measure because we are unable to calculate
with reasonable certainty the foreign exchange impact of unusual
gains and losses, acquisition and divestiture-related expenses,
potential future asset impairments and other certain significant
items, without unreasonable effort. The foreign exchange impacts of
these items are uncertain, depend on various factors, and could
have a material impact on U.S. GAAP reported results for the
guidance period.
(e) Primarily includes certain
nonrecurring costs related to acquisitions, divestitures and other
charges.
ZOETIS INC.
CONSOLIDATED REVENUE BY
SEGMENT(a) AND SPECIES
(UNAUDITED)
(millions of dollars)
Three Months Ended December
31,
% Change
2024
2023
Total
Foreign Exchange
Operational(b)
Revenue:
Companion Animal
$
1,570
$
1,448
8
%
(1
)%
9
%
Livestock
726
745
(3
)%
(4
)%
1
%
Contract Manufacturing & Human
Health
21
20
5
%
—
%
5
%
Total Revenue
$
2,317
$
2,213
5
%
(1
)%
6
%
U.S.
Companion Animal
$
1,008
$
941
7
%
—
%
7
%
Livestock
249
270
(8
)%
—
%
(8
)%
Total U.S. Revenue
$
1,257
$
1,211
4
%
—
%
4
%
International
Companion Animal
$
562
$
507
11
%
(2
)%
13
%
Livestock
477
475
—
%
(6
)%
6
%
Total International Revenue
$
1,039
$
982
6
%
(4
)%
10
%
Companion Animal:
Dogs and Cats
$
1,477
$
1,360
9
%
—
%
9
%
Horses
93
88
6
%
(1
)%
7
%
Total Companion Animal Revenue
$
1,570
$
1,448
8
%
(1
)%
9
%
Livestock:
Cattle
$
399
$
401
—
%
(4
)%
4
%
Swine
128
139
(8
)%
(4
)%
(4
)%
Poultry
117
127
(8
)%
(4
)%
(4
)%
Fish
65
62
5
%
1
%
4
%
Sheep and other
17
16
6
%
(1
)%
7
%
Total Livestock Revenue
$
726
$
745
(3
)%
(4
)%
1
%
(a) For a description of each segment, see
Zoetis' most recent Annual Report on Form 10-K.
(b) Operational revenue results (a
non-GAAP financial measure) is defined as revenue results excluding
the impact of foreign exchange.
ZOETIS INC.
CONSOLIDATED REVENUE BY
SEGMENT(a) AND SPECIES
(UNAUDITED)
(millions of dollars)
Twelve Months Ended December
31,
% Change
2024
2023
Total
Foreign Exchange
Operational(b)
Revenue:
Companion Animal
$
6,278
$
5,576
13
%
(1
)%
14
%
Livestock
2,898
2,890
—
%
(5
)%
5
%
Contract Manufacturing & Human
Health
80
78
3
%
—
%
3
%
Total Revenue
$
9,256
$
8,544
8
%
(3
)%
11
%
U.S.
Companion Animal
$
4,054
$
3,529
15
%
—
%
15
%
Livestock
1,020
1,026
(1
)%
—
%
(1
)%
Total U.S. Revenue
$
5,074
$
4,555
11
%
—
%
11
%
International
Companion Animal
$
2,224
$
2,047
9
%
(4
)%
13
%
Livestock
1,878
1,864
1
%
(7
)%
8
%
Total International Revenue
$
4,102
$
3,911
5
%
(5
)%
10
%
Companion Animal:
Dogs and Cats
$
5,993
$
5,291
13
%
(2
)%
15
%
Horses
285
285
—
%
(2
)%
2
%
Total Companion Animal Revenue
$
6,278
$
5,576
13
%
(1
)%
14
%
Livestock:
Cattle
$
1,531
$
1,503
2
%
(4
)%
6
%
Poultry
527
524
1
%
(5
)%
6
%
Swine
516
543
(5
)%
(6
)%
1
%
Fish
242
220
10
%
(1
)%
11
%
Sheep and other
82
100
(18
)%
(2
)%
(16
)%
Total Livestock Revenue
$
2,898
$
2,890
—
%
(5
)%
5
%
(a) For a description of each segment, see
Zoetis' most recent Annual Report on Form 10-K.
(b) Operational revenue results (a
non-GAAP financial measure) is defined as revenue results excluding
the impact of foreign exchange.
ZOETIS INC.
CONSOLIDATED REVENUE BY KEY
INTERNATIONAL MARKETS
(UNAUDITED)
(millions of dollars)
Three Months Ended December
31,
% Change
2024
2023
Total
Foreign Exchange
Operational(a)
Total International
$
1,039
$
982
6
%
(4
)%
10
%
Australia
80
75
7
%
5
%
2
%
Brazil
113
117
(3
)%
(13
)%
10
%
Canada
75
72
4
%
(1
)%
5
%
Chile
30
31
(3
)%
(2
)%
(1
)%
China
65
65
—
%
1
%
(1
)%
France
45
40
13
%
3
%
10
%
Germany
59
54
9
%
2
%
7
%
Italy
34
34
—
%
2
%
(2
)%
Japan
38
38
—
%
1
%
(1
)%
Mexico
40
43
(7
)%
(11
)%
4
%
Spain
30
28
7
%
(1
)%
8
%
United Kingdom
84
68
24
%
7
%
17
%
Other Developed
151
138
9
%
1
%
8
%
Other Emerging
195
179
9
%
(17
)%
26
%
Twelve Months Ended December
31,
% Change
2024
2023
Total
Foreign Exchange
Operational(a)
Total International
$
4,102
$
3,911
5
%
(5
)%
10
%
Australia
319
323
(1
)%
—
%
(1
)%
Brazil
414
393
5
%
(6
)%
11
%
Canada
277
255
9
%
(1
)%
10
%
Chile
123
140
(12
)%
(4
)%
(8
)%
China
270
320
(16
)%
(2
)%
(14
)%
France
156
142
10
%
1
%
9
%
Germany
225
202
11
%
1
%
10
%
Italy
129
121
7
%
1
%
6
%
Japan
147
158
(7
)%
(7
)%
—
%
Mexico
169
162
4
%
(1
)%
5
%
Spain
130
122
7
%
1
%
6
%
United Kingdom
314
277
13
%
3
%
10
%
Other Developed
564
512
10
%
—
%
10
%
Other Emerging
865
784
10
%
(22
)%
32
%
(a) Operational revenue results (a
non-GAAP financial measure) is defined as revenue results excluding
the impact of foreign exchange.
ZOETIS INC.
SEGMENT(a) EARNINGS
(UNAUDITED)
(millions of dollars)
Three Months Ended December
31,
% Change
2024
2023
Total
Foreign Exchange
Operational(b)
U.S.:
Revenue
$
1,257
$
1,211
4
%
—
%
4
%
Cost of sales
229
255
(10
)%
—
%
(10
)%
Gross profit
1,028
956
8
%
—
%
8
%
Gross margin
81.8
%
78.9
%
Operating expenses(c)
212
184
15
%
—
%
15
%
Other (income)/deductions-net
(3
)
6
*
*
*
U.S. Earnings
$
819
$
766
7
%
—
%
7
%
International:
Revenue
$
1,039
$
982
6
%
(4
)%
10
%
Cost of sales
336
322
4
%
(3
)%
7
%
Gross profit
703
660
7
%
(4
)%
11
%
Gross margin
67.7
%
67.2
%
Operating expenses(c)
180
165
9
%
(4
)%
13
%
Other (income)/deductions-net
—
1
*
*
*
International Earnings
$
523
$
494
6
%
(4
)%
10
%
Total Reportable Segments
$
1,342
$
1,260
7
%
(1
)%
8
%
Other business activities(d)
(151
)
(142
)
6
%
Reconciling Items:
Corporate(e)
(320
)
(320
)
—
%
Purchase accounting adjustments(f)
(33
)
(35
)
(6
)%
Acquisition and divestiture-related
costs(g)
(6
)
(1
)
*
Certain significant items(h)
(2
)
(12
)
(83
)%
Other unallocated(i)
(98
)
(100
)
(2
)%
Total Earnings(j)
$
732
$
650
13
%
(a) For a description of each segment, see
Zoetis' most recent Annual Report on Form 10-K.
(b) Operational results (a non-GAAP
financial measure) is defined as results excluding the impact of
foreign exchange.
(c) Operating expenses primarily consisted
of field selling, advertising and promotions, other marketing
expenses, and freight and logistics costs.
(d) Other business activities reflect the
research and development costs managed by our research and
development organization, as well as our contract manufacturing
business and human health business.
(e) Corporate includes, among other
things, certain costs associated with information technology,
administration expenses, interest income and expense, certain
compensation costs and other costs not charged to our operating
segments.
(f) Purchase accounting adjustments
include certain charges related to the amortization of fair value
adjustments to inventory, intangible assets and property, plant and
equipment not charged to our operating segments.
(g) Acquisition and divestiture-related
costs include costs associated with acquiring and integrating newly
acquired businesses, such as transaction costs and integration
costs, as well as costs associated with divesting and
disintegrating a portion of our business.
(h) Certain significant items includes
substantive, unusual items that, either as a result of their nature
or size, would not be expected to occur as part of our normal
business on a regular basis. Such items primarily include certain
asset impairment charges, restructuring charges and implementation
costs associated with cost-reduction/productivity initiatives that
are not associated with an acquisition and the impact of
divestiture-related gains and losses.
(i) Includes overhead expenses associated
with our global manufacturing and supply operations not directly
attributable to an operating segment, as well as certain
procurement costs.
(j) Defined as income before provision for
taxes on income.
* Calculation not meaningful.
ZOETIS INC.
SEGMENT(a) EARNINGS
(UNAUDITED)
(millions of dollars)
Twelve Months Ended December
31,
% Change
2024
2023
Total
Foreign Exchange
Operational(b)
U.S.:
Revenue
$
5,074
$
4,555
11
%
—
%
11
%
Cost of sales
936
900
4
%
—
%
4
%
Gross profit
4,138
3,655
13
%
—
%
13
%
Gross margin
81.6
%
80.2
%
Operating expenses(c)
805
786
2
%
—
%
2
%
Other (income)/deductions-net
(3
)
6
*
*
*
U.S. Earnings
$
3,336
$
2,863
17
%
—
%
17
%
International:
Revenue
$
4,102
$
3,911
5
%
(5
)%
10
%
Cost of sales
1,312
1,234
6
%
(3
)%
9
%
Gross profit
2,790
2,677
4
%
(7
)%
11
%
Gross margin
68.0
%
68.4
%
Operating expenses(c)
671
638
5
%
(4
)%
9
%
Other (income)/deductions-net
1
2
(50
)%
(81
)%
31
%
International Earnings
$
2,118
$
2,037
4
%
(7
)%
11
%
Total Reportable Segments
$
5,454
$
4,900
11
%
(3
)%
14
%
Other business activities(d)
(562
)
(496
)
13
%
Reconciling Items:
Corporate(e)
(1,213
)
(1,042
)
16
%
Purchase accounting adjustments(f)
(140
)
(159
)
(12
)%
Acquisition and divestiture-related
costs(g)
(18
)
(9
)
*
Certain significant items(h)
(79
)
33
*
Other unallocated(i)
(309
)
(291
)
6
%
Total Earnings(j)
$
3,133
$
2,936
7
%
(a) For a description of each segment, see
Zoetis' most recent Annual Report on Form 10-K.
(b) Operational results (a non-GAAP financial measure) is defined
as results excluding the impact of foreign exchange. (c) Operating
expenses primarily consisted of field selling, advertising and
promotions, other marketing expenses, and freight and logistics
costs. (d) Other business activities reflect the research and
development costs managed by our research and development
organization, as well as our contract manufacturing business and
human health business. (e) Corporate includes, among other things,
certain costs associated with information technology,
administration expenses, interest income and expense, certain
compensation costs and other costs not charged to our operating
segments. (f) Purchase accounting adjustments include certain
charges related to the amortization of fair value adjustments to
inventory, intangible assets and property, plant and equipment not
charged to our operating segments. (g) Acquisition and
divestiture-related costs include costs associated with acquiring
and integrating newly acquired businesses, such as transaction
costs and integration costs, as well as costs associated with
divesting and disintegrating a portion of our business. (h) Certain
significant items includes substantive, unusual items that, either
as a result of their nature or size, would not be expected to occur
as part of our normal business on a regular basis. Such items
primarily include certain asset impairment charges, restructuring
charges and implementation costs associated with
cost-reduction/productivity initiatives that are not associated
with an acquisition and the impact of divestiture-related gains and
losses. (i) Includes overhead expenses associated with our global
manufacturing and supply operations not directly attributable to an
operating segment, as well as certain procurement costs. (j)
Defined as income before provision for taxes on income. *
Calculation not meaningful.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20250212288993/en/
Media Contacts: Jennifer Albano
1-862-399-0810 (o) jennifer.albano@zoetis.com Laura Panza
1-973-975-5176 (o) laura.panza@zoetis.com Investor Contacts: Steve Frank 1-973-822-7141 (o)
steve.frank@zoetis.com Nick Soonthornchai 1-973-443-2792 (o)
nick.soonthornchai@zoetis.com
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