- Reports Revenue of $1.5 Billion,
Growing 7%, and Net Income of $312 Million, or $0.65 per Diluted
Share, Decreasing 11% and 10%, respectively, on a Reported Basis
for First Quarter 2019
- Reports Adjusted Net Income of $424
Million, or Adjusted Diluted EPS of $0.88, for First Quarter
2019
- Delivers 11% Operational Growth in
Revenue and 18% Operational Growth in Adjusted Net Income for First
Quarter 2019
- Updates Full Year 2019 Revenue
Guidance to $6.100 - $6.225 Billion and Diluted EPS of $2.79 -
$2.93 on a Reported Basis, or $3.42 - $3.52 on an Adjusted
Basis
Zoetis Inc. (NYSE: ZTS) today reported its financial results for
the first quarter of 2019 and updated its guidance for full year
2019.
The company reported revenue of $1.5 billion for the first
quarter of 2019, an increase of 7% compared with the first quarter
of 2018. Net income for the first quarter of 2019 was $312 million,
or $0.65 per diluted share, a decrease of 11% and 10%,
respectively, on a reported basis.
Adjusted net income1 for the first quarter of 2019 was $424
million, or $0.88 per diluted share, an increase of 16% and 17%,
respectively, on a reported basis. Adjusted net income for the
first quarter of 2019 excludes the net impact of $112 million for
purchase accounting adjustments, acquisition-related costs and
certain significant items.
On an operational2 basis, revenue for the first quarter of 2019
increased 11%, excluding the impact of foreign currency. Adjusted
net income for the first quarter of 2019 increased 18%
operationally, excluding the impact of foreign currency.
EXECUTIVE COMMENTARY
“We are off to a solid start for the year, with 11% operational
growth in the first quarter,” said Juan Ramόn Alaix, Chief
Executive Officer at Zoetis. “Our companion animal portfolio is
leading the way, driven by diagnostic sales from the acquisition of
Abaxis, as well as strong global sales of our parasiticides and key
dermatology products. We were able to achieve double-digit growth
this quarter, even as we faced challenges in certain swine and
cattle markets. This quarter’s performance once again highlights
the benefits of our diverse product portfolio, which we believe
provides long-term stability to our business in this dynamic and
global industry.”
“Despite these temporary challenges, we remain confident in our
projections for the year, and we are maintaining our guidance for
operational revenue growth and adjusted EPS targets,” said
Alaix.
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 livestock and companion animals tailored to local
trends and customer needs. In the first quarter of 2019:
- Revenue in the U.S. segment was
$718 million, an increase of 13% compared with the first quarter of
2018. Sales of companion animal products grew 30% driven primarily
by the acquisition of Abaxis, parasiticides (mainly Revolution®
Plus for cats and Simparica® for dogs), and key dermatology
products. Sales of livestock products declined 7% in the quarter,
with declines in cattle and swine more than offsetting growth in
poultry. Our cattle and swine product sales were impacted by the
timing of distributor purchasing patterns for medicated feed
additive products. Poultry growth was largely due to increased
sales of our portfolio of alternatives to antibiotics in medicated
feed additives.
- Revenue in the International
segment was $718 million, a decrease of 1% on a reported basis
and an increase of 7% operationally, compared with the first
quarter of 2018. Sales of companion animal products grew 15% on a
reported basis and 23% on an operational basis. Growth resulted
primarily from increased sales across our key dermatology
portfolio, the acquisition of Abaxis, and Simparica. Sales of
livestock products declined 9% on a reported basis and 1%
operationally, due to the negative impact of African Swine Fever in
China, as well as the divestiture of certain agribusiness products
in Japan; this decline was partially offset by growth across
poultry, fish and sheep.
INVESTMENTS IN GROWTH
As the world leader in animal health, Zoetis continues to invest
in strengthening its diverse portfolio of solutions across the
continuum of animal healthcare to help veterinarians and farmers
predict, prevent, detect and treat disease.
Since our last quarterly earnings announcement, Zoetis received
approval of Apoquel® (oclacitinib tablet) in China,
one of Zoetis’ largest companion animal markets. Other key
companion animal products, including Cytopoint®
(lokivetmab) and Simparica (sarolaner) for dogs, and
Revolution Plus (selamectin and sarolaner topical solution)
for cats, continued to gain approvals in markets outside the U.S.
Additionally, Core EQ Innovator™, the first and only
combination vaccine to offer protection against five core equine
diseases, was approved in Canada. In livestock, Zoetis launched
Clarifide® Plus for Jersey cattle in the U.S.,
the first genomic test for this specific breed that provides direct
indication of the genetic risk factors for seven of the most common
and costly adult cow diseases.
FINANCIAL GUIDANCE
Zoetis is updating its full year 2019 guidance, primarily to
reflect changes in foreign currency, which includes:
- Revenue between $6.100 billion and
$6.225 billion
- Reported diluted EPS between $2.79 and
$2.93
- Adjusted diluted EPS between $3.42 and
$3.52
This guidance reflects foreign exchange rates as of late April.
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 first quarter
2019 results, discuss financial guidance and respond to questions
from financial analysts. Investors and the public may access the
live webcast by visiting the Zoetis website at
http://investor.zoetis.com/events-presentations. A replay of the
webcast will be archived and made available on May 2, 2019.
About Zoetis
Zoetis is the leading animal health company, dedicated to
supporting its customers and their businesses. Building on more
than 65 years of experience in animal health, Zoetis discovers,
develops, manufactures and commercializes medicines, vaccines and
diagnostic products, which are complemented by biodevices, genetic
tests and a range of services. Zoetis serves veterinarians,
livestock producers and people who raise and care for farm and
companion animals with sales of its products in more than 100
countries. In 2018, the company generated annual revenue of $5.8
billion with approximately 10,000 employees. For more information,
visit www.zoetis.com.
1 Adjusted net income and its components and adjusted diluted
earnings per share (non-GAAP financial measures) are defined as
reported net income attributable to Zoetis and reported diluted
earnings per share, excluding purchase accounting adjustments,
acquisition-related costs and certain significant items.
2 Operational revenue growth (a non-GAAP financial measure) is
defined as growth excluding the impact of foreign exchange.
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, expectations
regarding products, 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 and dividend payments, tax rate and tax regimes,
changes in the tax regimes and laws in other
jurisdictions, 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 Annual Report on Form 10-K for the fiscal year ended
December 31, 2018, 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 and operational results (which
exclude the impact of foreign exchange), 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. Reconciliation of non-GAAP financial measures and
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 in
the 'Investors' section of our website at www.zoetis.com, on our
Facebook page at http://www.facebook.com/zoetis and on Twitter
@zoetis. We encourage investors and potential investors to consult
our website regularly and to follow us on Facebook and Twitter for
important information about us.
ZOETIS INC.
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME(a)
(UNAUDITED) (millions of dollars, except per share data)
First Quarter 2019 2018 % Change Revenue $ 1,455 $
1,366 7 Costs and expenses: Cost of sales 518 447 16 Selling,
general and administrative expenses 369 338 9 Research and
development expenses 102 97 5 Amortization of intangible assets 38
23 65
Restructuring charges and certain
acquisition-related costs
5 2 * Interest expense 56 47 19 Other (income)/deductions–net (14 )
(5 ) * Income before provision for taxes on income 381 417 (9 )
Provision for taxes on income 69 67 3 Net income
before allocation to noncontrolling interests 312 350 (11 ) Less:
Net income/(loss) attributable to noncontrolling interests —
(2 ) (100 ) Net income attributable to Zoetis $ 312 $ 352
(11 ) Earnings per share—basic $ 0.65 $ 0.72
(10 ) Earnings per share—diluted $ 0.65 $ 0.72
(10 ) Weighted-average shares used to calculate
earnings per share Basic 479.6 485.9 Diluted 483.1
489.8
(a) The condensed consolidated statements of income present
the first quarter ended March 31, 2019 and March 31, 2018.
Subsidiaries operating outside the United States are included for
the first quarter ended February 28, 2019 and February 28, 2018.
*
Calculation not meaningful.
Certain amounts and percentages may reflect rounding
adjustments.
ZOETIS INC. RECONCILIATION OF GAAP REPORTED TO NON-GAAP
ADJUSTED INFORMATION CERTAIN LINE ITEMS (UNAUDITED) (millions of
dollars, except per share data) Quarter ended March
31, 2019
GAAP Reported(a)
PurchaseAccountingAdjustments
Acquisition-RelatedCosts(1)
CertainSignificantItems(2)
Non-GAAPAdjusted(b)
Cost of sales(c)
$ 518 $ (14 ) $ — $ (70 ) $ 434
Gross profit
937 14 — 70 1,021 Selling, general and
administrative expenses(c)
369 (18 ) — — 351 Amortization of
intangible assets(d)
38 (34 ) — — 4
Restructuring charges and certain
acquisition-relatedcosts
5 — (5 ) — — Income before provision for taxes on income
381 66 5 70 522 Provision for taxes on income
69 20 1
8 98 Net income attributable to Zoetis
312 46 4 62 424
Earnings per common share attributable to Zoetis–diluted
0.65 0.09 0.01 0.13 0.88 Quarter ended March 31, 2018
GAAP Reported(a)
PurchaseAccountingAdjustments
Acquisition-RelatedCosts(1)
CertainSignificantItems(2)
Non-GAAPAdjusted(b)
Cost of sales(c)
$ 447 $ (2 ) $ — $ (1 ) $ 444 Gross
profit
919 2 — 1 922 Selling, general and administrative
expenses(c)
338 (1 ) — (1 ) 336 Research and development
expenses(c)
97 (1 ) — — 96 Amortization of intangible
assets(d)
23 (19 ) — — 4
Restructuring charges and certain
acquisition-relatedcosts
2 — (1 ) (1 ) — Income before provision for taxes on income
417 23 1 3 444 Provision for taxes on income
67 11 —
3 81 Net income attributable to Zoetis
352 12 1 — 365
Earnings per common share attributable to Zoetis–diluted
0.72 0.03 — — 0.75 (a) The condensed
consolidated statements of income present the first quarter ended
March 31, 2019 and March 31, 2018. Subsidiaries operating outside
the United States are included for the first quarter ended February
28, 2019 and February 28, 2018. (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. (c) Exclusive of amortization of intangible
assets, except as discussed in footnote (d) below. (d)
Amortization expense related to finite-lived acquired intangible
assets that contribute to our ability to sell, manufacture,
research, market and distribute products, compounds and
intellectual property is included in Amortization of intangible
assets as these intangible assets benefit multiple business
functions. Amortization expense related to finite-lived acquired
intangible assets that are associated with a single function is
included in Cost of sales, Selling, general and administrative
expenses or Research and development expenses, as appropriate.
See Notes to Reconciliation of GAAP Reported to Non-GAAP
Adjusted Information for notes (1) and (2).
Certain amounts may reflect rounding adjustments.
ZOETIS INC.
NOTES TO RECONCILIATION OF GAAP REPORTED TO NON-GAAP ADJUSTED
INFORMATION CERTAIN LINE ITEMS (UNAUDITED)
(millions of dollars)
(1) Acquisition-related costs include the following: First
Quarter 2019 2018 Integration costs(a) $ 1 $ 1 Restructuring
charges(b) 4 — Total acquisition-related costs—pre-tax 5 1
Income taxes(c) 1 — Total acquisition-related costs—net of
tax $ 4 $ 1 (a)
Integration costs represent external,
incremental costs directly related to integrating acquired
businesses and primarily include expenditures for consulting and
the integration of systems and processes. Included in Restructuring
charges and certain acquisition-related costs.
(b)
Represents employee termination costs,
included in Restructuring charges and certain acquisition-related
costs.
(c)
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.
Certain amounts may reflect rounding adjustments.
(2) Certain significant items include the
following:
First Quarter 2019 2018 Supply
network strategy(a) $ 2 $ 2 Other(b) 68 1 Total certain
significant items—pre-tax 70 3 Income taxes(c) 8 3 Total
certain significant items—net of tax $ 62 $ — (a)
Represents consulting fees, included in
Cost of sales, related to cost-reduction and productivity
initiatives.
(b)
For the three months ended March 31, 2019,
represents a change in estimate related to inventory costing,
included in Cost of sales.
(c)
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.
For the first quarter ended March 31,
2018, also includes a net tax benefit related to a
measurement-period adjustment to the provisional one-time mandatory
deemed repatriation tax on the company's undistributed non-U.S.
earnings pursuant to the Tax Cuts and Jobs Act.
Certain amounts may reflect rounding
adjustments.
ZOETIS INC.
ADJUSTED SELECTED COSTS, EXPENSES AND
INCOME(a)
(UNAUDITED) (millions of dollars) First Quarter
% Change 2019 2018 Total
ForeignExchange
Operational(b)
Adjusted cost of sales $ 434 $ 444 (2 )% (6 )% 4 % as a percent of
revenue 29.8 % 32.5 % NA NA NA Adjusted SG&A expenses 351 336 4
% (4 )% 8 % Adjusted R&D expenses 102 96 6 % (2 )% 8 % Adjusted
net income attributable to Zoetis 424 365 16 % (2 )% 18 %
(a) Adjusted cost of sales, adjusted selling,
general, and administrative (SG&A) expenses, adjusted research
and development (R&D) expenses, and adjusted net income
attributable to Zoetis (non-GAAP financial measures) are defined as
the corresponding reported U.S. GAAP income statement line items
excluding purchase accounting adjustments, acquisition-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 Operations and Reconciliation of GAAP Reported to
Non-GAAP Adjusted Information. (b) Operational growth (a
non-GAAP financial measure) is defined as growth excluding the
impact of foreign exchange. ZOETIS INC. 2019 GUIDANCE
Selected Line Items
(millions of dollars, except per share
amounts)
Full Year 2019
Revenue $6,100 to $6,225 Operational growth(a) 7.5% to 9.5%
Organic operational growth(b) 4.5% to 6.5% Adjusted cost of
sales as a percentage of revenue(c) 31% to 32% Adjusted
SG&A expenses(c) $1,450 to $1,500 Adjusted R&D
expenses(c) $445 to $465 Adjusted interest expense and other
(income)/deductions(c) Approximately $200 Effective tax rate
on adjusted income(c) 20% to 21% Adjusted diluted EPS(c)
$3.42 to $3.52 Adjusted net income(c) $1,650 to $1,700
Operational growth(a)(d) 8% to 11% Certain significant items
and acquisition-related costs(e) $130 to $150
The guidance reflects foreign exchange rates as of late April
2019.
Reconciliations of 2019 reported guidance to 2019 adjusted
guidance follows:
(millions of dollars, except per share amounts)
Reported
Certain significantitems
andacquisition-relatedcosts(e)
Purchaseaccounting
Adjusted(c) Cost of sales as a percentage of revenue
32.8 % - 33.8% ~ (1.3%) ~ (0.5%) 31 % - 32%
SG&A expenses $1,525 to $1,575
($75 ) $1,450 to $1,500 R&D expenses $447
to $467 ($2 ) $445 to $465
Interest expense and other (income)/deductions ~ $200
~ $200 Effective tax rate 20% to
21% 20% to 21% Diluted EPS
$2.79 to $2.93 $0.22 to $0.26 $ 0.37
$3.42 to $3.52 Net income attributable to Zoetis
$1,345 to $1,415 $105 to $125 ~ $180 $1,650 to
$1,700 (a) Operational growth (a non-GAAP financial
measure) excludes the impact of foreign exchange. (b)
Organic operational growth (a non-GAAP financial measure) excludes
the impact of the acquisition of Abaxis as well as foreign
exchange. (c) Adjusted net income and its components and
adjusted diluted EPS are defined as reported U.S. generally
accepted accounting principles (GAAP) net income and its components
and reported diluted EPS excluding purchase accounting adjustments,
acquisition-related costs and certain significant items. Adjusted
cost of sales, adjusted selling, general and administrative
(SG&A) expenses, adjusted research and development (R&D)
expenses, and adjusted interest expense and other
(income)/deductions 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 to the most directly comparable GAAP reported
financial measure because we are unable to calculate with
reasonable certainty the foreign exchange impact of unusual gains
and losses, acquisition-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 GAAP reported results for the guidance period. (e)
Primarily includes certain nonrecurring costs related to the
acquisition of Abaxis and other charges. ZOETIS INC.
CONSOLIDATED REVENUE BY SEGMENT(a) AND
SPECIES
(UNAUDITED) (millions of dollars) First Quarter
% Change 2019 2018 Total
ForeignExchange
Operational(b)
Revenue: Livestock $ 707 $ 770 (8 )%
(5 )% (3 )% Companion Animal 729 590 24 % (3 )% 27 % Contract
Manufacturing & Human Health Diagnostics 19 6 * *
*
Total Revenue $ 1,455 $
1,366 7 % (4 )% 11
% U.S. Livestock $ 273 $ 292 (7
)% — % (7 )% Companion Animal 445 342 30 % — % 30 %
Total U.S. Revenue $ 718 $
634 13 % — % 13
% International Livestock $ 434 $ 478 (9 )% (8
)% (1 )% Companion Animal 284 248 15 % (8 )% 23 %
Total International Revenue $ 718
$ 726 (1 )% (8 )%
7 % Livestock: Cattle $
380 $ 416 (9 )% (6 )% (3 )% Swine 149 175 (15 )% (5 )% (10 )%
Poultry 139 136 2 % (5 )% 7 % Fish 23 22 5 % (4 )% 9 % Other 16
21 (24 )% (6 )% (18 )%
Total Livestock Revenue
$ 707 $ 770 (8
)% (5 )% (3 )%
Companion Animal: Dogs and Cats $ 688 $ 549 25 % (4 )% 29 %
Horses 41 41 — % (6 )% 6 %
Total Companion Animal
Revenue $ 729 $ 590
24 % (3 )% 27 %
(a) For a description of each segment, see Zoetis' most
recent Annual Report on Form 10-K. (b) Operational revenue growth
(a non-GAAP financial measure) is defined as revenue growth
excluding the impact of foreign exchange.
*
Calculation not meaningful.
Certain amounts and percentages may reflect rounding
adjustments.
ZOETIS INC. CONSOLIDATED REVENUE BY KEY INTERNATIONAL
MARKETS (UNAUDITED) (millions of dollars) First
Quarter % Change 2019 2018 Total
ForeignExchange
Operational(a)
Total International $
718.0 $ 725.9
(1 )% (8 )% 7 %
Australia 48.0 47.6 1 % (9 )% 10 %
Brazil 60.1
69.6 (14 )% (15 )% 1 %
Canada 41.1 40.2 2 % (6 )% 8 %
China 59.5 63.9 (7 )% (5 )% (2 )%
France 32.3 33.2 (3
)% (7 )% 4 %
Germany 36.5 37.5 (3 )% (6 )% 3 %
Italy
28.1 27.1 4 % (6 )% 10 %
Japan 37.3 40.9 (9 )% — % (9 )%
Mexico 28.1 24.4 15 % (3 )% 18 %
Spain 27.1 25.3 7 %
(6 )% 13 %
United Kingdom 56.7 52.1 9 % (7 )% 16 %
Other
developed markets 83.8 79.3 6 % (6 )% 12 %
Other emerging
markets 179.4 184.8 (3 )% (11 )% 8 % (a)
Operational revenue growth (a non-GAAP financial measure) is
defined as revenue growth excluding the impact of foreign exchange.
Certain amounts and percentages may reflect rounding
adjustments.
ZOETIS INC.
SEGMENT(a) EARNINGS
(UNAUDITED) (millions of dollars)
First Quarter % Change 2019 2018 Total
ForeignExchange
Operational(b)
U.S.:
Revenue $ 718 $ 634 13 % — % 13 % Cost of Sales 147 140
5 % — % 5 % Gross Profit 571 494 16 % — % 16 % Gross Margin
79.5 % 77.9 % Operating Expenses 110 96 15 % — % 15 % Other
(income)/deductions — — — % — % — %
U.S.
Earnings $ 461 $ 398 16
% — % 16 %
International:
Revenue $ 718 $ 726 (1 )% (8 )% 7 % Cost of Sales 210 234
(10 )% (10 )% — % Gross Profit 508 492 3 % (7 )% 10 % Gross
Margin 70.8 % 67.8 % Operating Expenses 132 133 (1 )% (11 )% 10 %
Other (income)/deductions — 1 * * *
International
Earnings $ 376 $ 358 5
% (5 )% 10 % Total
Reportable Segments $ 837 $ 756
11 % (2 )% 13 %
Other business activities(c) (80 ) (81 ) (1 )% Reconciling Items:
Corporate(d) (162 ) (153 ) 6 % Purchase accounting adjustments(e)
(66 ) (23 ) * Acquisition-related costs(f) (5 ) (1 ) * Certain
significant items(g) (70 ) (3 ) * Other unallocated(h) (73 ) (78 )
(6 )%
Total Earnings(i) $ 381
$ 417 (9 )% (a) For a
description of each segment, see Zoetis' most recent Annual Report
on Form 10-K. (b) Operational growth (a non-GAAP financial
measure) is defined as growth excluding the impact of foreign
exchange. (c) 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 diagnostic business. (d) Corporate includes,
among other things, administration expenses, interest expense,
certain compensation costs, certain procurement costs, and other
costs not charged to our operating segments. (e) 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. (f) Acquisition-related costs include
costs associated with acquiring and integrating newly acquired
businesses, such as transaction costs and integration costs.
(g) 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 restructuring charges and
implementation costs associated with our
cost-reduction/productivity initiatives that are not associated
with an acquisition, costs associated with the operational
efficiency initiative and supply network strategy, and the impact
of divestiture-related gains and losses. (h) Includes
overhead expenses associated with our manufacturing and supply
operations not directly attributable to an operating segment, as
well as certain procurement costs. (i) Defined as income
before provision for taxes on income.
*
Calculation not meaningful.
Certain amounts and percentages may reflect rounding
adjustments.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190502005380/en/
Media:Kristen Seely1-973-443-2777
(o)kristen.seely@zoetis.com
Elinore White1-973-443-2835 (o)elinore.y.white@zoetis.com
Investors:Steve Frank1-973-822-7141
(o)steve.frank@zoetis.com
Marissa Patel1-973-443-2996 (o)marissa.patel@zoetis.com
Zoetis (NYSE:ZTS)
Historical Stock Chart
From Jun 2024 to Jul 2024
Zoetis (NYSE:ZTS)
Historical Stock Chart
From Jul 2023 to Jul 2024