10-QPeriod: Q1 FY2024

Zoetis Inc. Quarterly Report for Q1 Ended Mar 31, 2024

Filed May 2, 2024For Securities:ZTS

Summary

Zoetis Inc. reported strong financial results for the first quarter of 2024, with total revenue increasing by 10% to $2.19 billion compared to the same period in 2023. This growth was driven by a solid 12% increase on an operational basis, primarily attributed to price increases (7%), new product volume (4%), and key dermatology product volume (3%). Net income attributable to Zoetis Inc. rose by 9% to $599 million, with diluted earnings per share increasing from $1.19 to $1.31. The company's performance highlights the strength and resilience of the animal health market, with notable growth in companion animal products, particularly in the U.S. segment. The International segment also showed positive operational growth despite currency headwinds. Zoetis continues to invest in research and development to fuel future innovation and maintain its market leadership.

Financial Highlights

51 data points
Beta

Revenue

$2.19B

70.6% Gross Margin

Net Income

$599.00M

27.4% Net Margin

EPS (Diluted)

$1.31

Total Assets

$14.35B

Cash & Equivalents

$1.98B

Free Cash Flow

$455.00M

Financial Statements
Beta
Revenue$2.19B
Cost of Revenue$643.00M
Gross Profit$1.55B
SG&A Expenses$547.00M
Interest Expense$58.00M
Net Income$599.00M
EPS (Basic)$1.31
EPS (Diluted)$1.31
Shares Outstanding (Basic)458.00M
Shares Outstanding (Diluted)458.80M

Key Highlights

  • 1Total revenue increased by 10% to $2.19 billion for Q1 2024, up from $2.00 billion in Q1 2023.
  • 2Operational revenue growth was strong at 12%, driven by price increases, new product volume, and growth in key dermatology products.
  • 3Net income attributable to Zoetis Inc. increased by 9% to $599 million ($0.37 billion).
  • 4Diluted earnings per share (EPS) grew to $1.31 from $1.19 in the prior year period, a 10% increase.
  • 5The U.S. segment revenue saw a significant 16% increase, largely driven by strong performance in companion animal products.
  • 6The International segment's operational revenue increased by 8%, demonstrating global demand despite unfavorable foreign exchange impacts.
  • 7Research and Development expenses increased by 14% to $162 million, reflecting continued investment in innovation.

Frequently Asked Questions

Zoetis' revenue growth was primarily driven by a combination of price increases (approximately 7%), volume growth from new products (approximately 4%), and increased volume from key dermatology products (approximately 3%). Operational revenue growth was 12%, which was partially offset by a 2% negative impact from foreign exchange.

The U.S. segment showed robust growth with revenue increasing by 16% to $1.16 billion, primarily due to strong companion animal product sales. The International segment's revenue increased by 3% overall, but on an operational basis, it grew by 8%, driven by companion animal products, despite a 5% negative impact from foreign exchange.

Zoetis has an ongoing share repurchase program. As of March 31, 2024, there was $1.2 billion remaining under a $3.5 billion authorization. The company also declared dividends of $0.432 per share in the first quarter of 2024, up from $0.375 per share in the prior year, indicating a commitment to returning capital to shareholders.

While revenue grew, cost of sales as a percentage of revenue remained stable at 29.4%. Selling, general, and administrative (SG&A) expenses increased by 8%, reflecting investments in compensation, advertising, and technology. Research and development (R&D) expenses saw a 14% increase to $162 million, signaling continued investment in future growth and innovation.