Shares of Zoetis (NYSE: ZTS), the leading animal pharmaceutical maker, were climbing today after the company reported better-than-expected results in its second-quarter earnings report and raised its guidance for the full year.
As a result, the stock was up 6.4% as of 10:34 a.m. ET.
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Zoetis gets back on track
After some weakness earlier this year, Zoetis posted solid results with revenue up 8% to $2.36 billion, ahead of estimates at $2.31 billion.
Growth was led by the U.S. segment, which posted 12% growth to $1.3 billion, driven by its monoclonal antibody products for osteoarthritis. Sales of livestock products were up 11%, showing balanced growth between pets and livestock. International revenue growth was up 10% on an operating basis to $1 billion, but up just 4% on a reported basis.
Gross margin increased from 81.6% to 82.3%, and adjusted earnings per share increased 11% to $1.56, beating expectations at $1.49.
CEO Kristin Peck said, "We had another outstanding quarter, demonstrating the strong demand for our trusted, innovative products, our ability to capture and expand markets, and the dedication of our purpose-driven colleagues."
What's next for Zoetis
In response to strong results and underlying strength in the companion animal market, Zoetis raised its guidance, calling for operational revenue growth of 9% to 11% to between $9.1 billion and $9.25 billion. That's up from a prior range of $9.05 billion to $9.2 billion and slightly ahead of the consensus at $9.15 billion.
On the bottom line, the company now expects adjusted earnings per share of $5.78 to $5.88, ahead of the earlier range at $5.71 to $5.81. The new range was also better than the consensus at $5.77.
Given the beat-and-raise quarter, tailwinds in the companion animal segment, and the company's overall competitive strength, it's not surprising to see the stock moving higher on today's news.
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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Zoetis. The Motley Fool has a disclosure policy.
