In a release dated May 2nd, Zoetis (ZTS) reported on results for the 1st. quarter of FY 2024 ending March 31st. For Q1 revenue was above analysts’ estimates by 1.9 percent and the Company beat on EPS by 3.4 percent.
Zoetis reported net income of $599 million on revenue of $2,190 million. These values are compared with Q1 FY 2023 with net earnings of $552 million on sales of $2,000 million. Diluted EPS increased from $1.19 in Q1 FY 2023 to $1.31 for the most recently completed quarter.
For Q1 2024 gross margin was 70.6 percent (70.6 percent Q1 2023); operating margin attained 33.2 percent (38.2 percent)
In reviewing product segments, for Q1 2024 total revenue from companion animal products amounted to $1,450 million (65.2 per cent of Company sales) compared to revenue from livestock products amounting to $720 million (32.8 percent). The remainder was derived from other products and services.
Domestic U.S. sales of livestock products at $265 represented 36.8 percent of total livestock revenue of $720 million, down 5.0 percent from Q1 2023. International sales of livestock products represented 45.1 percent of non-U.S. Company revenue of $1,007 up 3.0 percent from Q1 2023. Poultry products and services at $139 million represented 19.3 percent of livestock sales of $720, unchanged from Q1 2023 and comprising 6.3 percent of total Company sales.
In commenting on Q1 results, Kristin Peck, CEO stated, “We achieved 16% revenue growth in the U.S. and 8% operational revenue growth internationally, and our companion animal portfolio grew an impressive 20% operationally, fueled by our innovative franchises in pet parasiticides, osteoarthritis pain and dermatology. Our scientific breakthroughs have firmly established us as trusted and preferred partners to our customers, and we will continue to invest in the talent, pipeline and capabilities that will support future growth."
Ms. Peck continued “Our innovation continues to be our differentiator, and we'll continue to lead the way by investing in areas of unmet need to advance care for animals. The strength of the human-animal bond and the growing demand for a secure and sustainable food supply reinforce the essential nature of the animal health industry and our innovative portfolio. We will continue to deliver strong growth in 2024, while investing for the future."
Zoetis posted guidance for fiscal 2024 including revenue ranging from a slightly reduced $9,050 to $9,200 million and net income from $2,450 to $2,495 million with diluted EPS ranging from an unchanged $5.34 to $5.44.
On April 28th Zoetis announced sale of the livestock feed additives and water-soluble portfolio and six manufacturing plants to Phibro Animal Health for a consideration of $350 million. Ms. Peck noted “We remain committed to providing innovative solutions to our livestock customers. We believe that the long-term value of the transferred portfolio will be fully realized with Phibro Animal Health which will continue to expand its reach given their strong relationships with customers worldwide.”
The Company posted total assets of $14,348 million on March 31st 2024 of which $4,854 million represented goodwill and intangibles against long-term debt and lease obligations of $6,746 million. Market capitalization was $76,325 million on May 3rd. Zoetis has traded over the past 52-weeks in a range of $144.80 to $201.92 with a 50-day moving average of $170.04. The Company achieved a trailing twelve-month operating margin of 36.6 percent and a profit margin of 27.4 percent.