- Reports Revenue of $2.0 Billion, Growing 6%, and Net Income
of $595 Million, or $1.26 per Diluted Share, Increasing 6% and 8%,
Respectively, on a Reported Basis for First Quarter 2022
- Delivers 9% Operational Growth in Revenue and 8% Operational
Growth in Adjusted Net Income for First Quarter 2022
- Reports Adjusted Net Income of $625 Million, or Adjusted
Diluted EPS of $1.32, for First Quarter 2022
- Updates Full Year 2022 Revenue Guidance to $8.225 - $8.375
Billion, with Diluted EPS of $4.65 to $4.77 on a Reported Basis, or
$4.99 to $5.09 on an Adjusted Basis, Due to the Negative Impact of
Foreign Exchange Rates
Zoetis Inc. (NYSE: ZTS) today reported its financial results for
the first quarter of 2022 and updated its guidance for full year
2022 due to the negative impact of recent changes in foreign
exchange rates. The updated guidance reflects the same operational
growth rates for revenue and adjusted net income as stated in the
company’s previous guidance for 2022.
The company reported revenue of $2.0 billion for the first
quarter of 2022, an increase of 6% compared with the first quarter
of 2021. Net income for the first quarter of 2022 was $595 million,
or $1.26 per diluted share, an increase of 6% and 8%, respectively,
on a reported basis.
Adjusted net income1 for the first quarter of 2022 was $625
million, or $1.32 per diluted share, an increase of 4% and 5%,
respectively, on a reported basis. Adjusted net income for the
first quarter of 2022 excludes the net impact of $30 million for
purchase accounting adjustments, acquisition-related costs and
certain significant items.
On an operational2 basis, revenue for the first quarter of 2022
increased 9%, excluding the impact of foreign currency. Adjusted
net income for the first quarter of 2022 increased 8%
operationally, excluding the impact of foreign currency.
EXECUTIVE COMMENTARY
“Zoetis delivered another strong quarter, with 9% operational
revenue growth and 8% operational growth in adjusted net income,
driven by the strength of our companion animal portfolio,” said
Zoetis Chief Executive Officer Kristin Peck. “Our strength across
parasiticides, dermatology products, monoclonal antibodies for pain
and diagnostics are all capitalizing on the marriage of positive
trends in petcare with the customer-driven science coming from
Zoetis."
“As we look at the rest of the year, we are updating our
guidance to reflect the negative impact of recent changes to
foreign exchange rates, but this has no impact on our previous
operational growth rates and assumptions for the year. Even as we
face uncertainties related to the war in Ukraine, COVID-19
lockdowns, inflation and ongoing supply chain constraints, we
remain confident in the underlying strength and performance of our
business. Our diverse portfolio, global scale, talented colleagues
and continuous innovations remain the foundation of our long-term
success and durability.”
QUARTERLY HIGHLIGHTS
Zoetis organizes and manages its commercial operations across
two 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 first quarter of 2022:
- Revenue in the U.S. segment was $1.020 billion, an
increase of 9% compared with the first quarter of 2021. Sales of
companion animal products increased 18%, driven by growth across
the company’s parasiticide portfolio, primarily from sales of
Simparica Trio®. The key dermatology portfolio also significantly
contributed to growth across both the Apoquel® and Cytopoint®
brands. Sales of livestock products declined 11% in the quarter.
Sales of cattle products declined as a result of generic
competition for Draxxin® and unfavorable conditions in beef and
dairy markets, including increased input costs and dry weather
conditions. The company’s poultry portfolio declined due to the
expanded use of lower cost alternatives and generic competition for
Zoamix®, the company’s alternative to antibiotics in medicated feed
additives. Sales of swine products grew slightly as a result of
favorable market conditions for producers and increased disease
prevalence.
- Revenue in the International segment was $948 million,
an increase of 3% on a reported basis and an increase of 8%
operationally compared with the first quarter of 2021. Sales of
companion animal products increased 17% on a reported basis and 23%
operationally. Growth resulted from increased sales of the
company’s key dermatology portfolio across both the Apoquel and
Cytopoint brands, as well as the recently launched monoclonal
antibody products for osteoarthritis pain, Librela® and Solensia®.
Sales in the Simparica portfolio, including Simparica Trio, also
contributed to growth in the quarter. Sales of livestock products
declined 9% on a reported basis and declined 3% operationally.
Sales of swine products decreased in the quarter as a result of
falling pork prices due to an increased supply in China and a
comparative period when pork prices were at an all-time high.
Growth in the company’s fish portfolio was primarily the result of
increased sales of the Alpha Flux® sea lice treatment product and
Alpha Ject® LiVac SRS vaccine in Chile. Sales of cattle products
grew due to favorable market conditions and price in key markets,
including Brazil and Australia, as well as demand generation
efforts in emerging markets such as Turkey and China. Growth in the
poultry portfolio was primarily due to market growth, demand
generation efforts and supply recovery in Australia, Mexico and
Brazil.
INVESTMENTS IN GROWTH
Zoetis continues to gain market approvals and introduce
lifecycle innovations for key brands. On the companion animal side
of the business, the company received approval in Australia for
Solensia (frunevetmab), the first injectable monoclonal
antibody (mAb) for the alleviation of pain associated with
osteoarthritis (OA) in cats; it is also approved in the U.S., the
European Union (EU), the U.K., Canada and Switzerland. Another mAb
therapy, Cytopoint (lokivetmab), received a claim extension
in Canada. Previously approved for the treatment of atopic
dermatitis in dogs, the product is now approved for allergic
dermatitis as well.
On the livestock side of the business, Zoetis enhanced its
cattle vaccine portfolio with approval in the U.S. of
Protivity®, the first modified live vaccine to offer
protection against Mycoplasma bovis, providing cattle producers and
veterinarians with broader overall protection against bovine
respiratory disease (BRD). The company also gained approval in
Brazil for Draxxin KP (tulathromycin ketoprofen). This
injectable, also for the treatment of BRD, combines the
antimicrobial properties of Draxxin with the nonsteroidal
anti-inflammatory (NSAID) Ketoprofen to rapidly reduce fever in a
single dose. It is also approved in the U.S., Canada, the EU (where
it is known as Draxxin Plus), Australia and Mexico. In poultry, the
company received approval in Brazil for Poulvac® Procerta™
HVT-IBD. Also approved in the U.S. and Canada, this recombinant
vector vaccine provides early protection against Marek’s disease
and the contemporary infectious bursal disease (IBD) viruses in
chickens.
In Diagnostics, Zoetis announced the addition of artificial
intelligence (AI) blood smear testing to its multi-purpose
platform, Vetscan Imagyst™. Introduced in September 2020,
Vetscan Imagyst is a first-of-its-kind technology with a multitude
of applications, including AI fecal analysis, digital cytology
image transfer and now AI blood smear – helping veterinarians
broaden in-clinic diagnostic offerings to provide the best possible
care for dogs and cats.
FINANCIAL GUIDANCE
Zoetis is updating its full year 2022 guidance due to the
negative impact of recent changes to foreign exchange rates, and
this includes:
- Revenue between $8.225 billion to $8.375 billion
- Reported diluted EPS between $4.65 to $4.77
- Adjusted diluted EPS between $4.99 to $5.09
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
2022 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 5, 2022.
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 70 years innovating ways to
predict, prevent, detect, and treat animal illness, Zoetis
continues to stand by those raising and caring for animals
worldwide -- from livestock farmers to veterinarians and pet
owners. 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
$7.8 billion in 2021 with approximately 12,100 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 and reported diluted earnings per share,
excluding purchase accounting adjustments, acquisition-related
costs and certain significant items.
2 Operational 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; disruptions in our global supply
chain; R&D costs; timing and likelihood of success;
expectations regarding products, product approvals or products
under development, expected timing of product launches; the impact
of the coronavirus (COVID-19) global pandemic and any recovery
therefrom on our business, supply chain, customers and employees;
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; tax rate 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 Annual Report on Form 10-K for the fiscal year ended
December 31, 2021, 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. Such risks and
uncertainties may be amplified by the COVID-19 global pandemic and
its potential impact on the global economy and our business. 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. 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 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.
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
March 31,
2022
2021
% Change
Revenue
$
1,986
$
1,871
6
Costs and expenses:
Cost of sales
569
549
4
Selling, general and administrative
expenses
465
409
14
Research and development expenses
122
118
3
Amortization of intangible assets
41
40
3
Restructuring charges and certain
acquisition-related costs
2
9
(78
)
Interest expense, net of capitalized
interest
53
57
(7
)
Other (income)/deductions–net
7
2
*
Income before provision for taxes on
income
727
687
6
Provision for taxes on income
133
129
3
Net income before allocation to
noncontrolling interests
594
558
6
Less: Net loss attributable to
noncontrolling interests
(1
)
(1
)
—
Net income attributable to Zoetis Inc.
$
595
$
559
6
Earnings per share—basic
$
1.26
$
1.18
7
Earnings per share—diluted
$
1.26
$
1.17
8
Weighted-average shares used to calculate
earnings per share
Basic
472.2
475.5
Diluted
474.1
477.9
(a)
The condensed consolidated statements of
income present the three months ended March 31, 2022 and 2021.
Subsidiaries operating outside the United States are included for
the three months ended February 28, 2022 and 2021.
*
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 March 31,
2022
GAAP Reported(a)
Purchase Accounting
Adjustments
Acquisition- Related Costs(1)
Certain Significant Items(2)
Non-GAAP Adjusted(b)
Cost of sales
$
569
$
(1
)
$
—
$
(3
)
$
565
Gross profit
1,417
1
—
3
1,421
Selling, general and administrative
expenses
465
(7
)
—
—
458
Amortization of intangible assets
41
(32
)
—
—
9
Restructuring charges and certain
acquisition-related costs
2
—
(2
)
—
—
Other (income)/deductions–net
7
—
—
3
10
Income before provision for taxes on
income
727
40
2
—
769
Provision for taxes on income
133
10
1
1
145
Net income attributable to Zoetis
595
30
1
(1
)
625
Earnings per common share attributable to
Zoetis–diluted
1.26
0.06
—
—
1.32
Three Months Ended March 31,
2021
GAAP Reported(a)
Purchase Accounting
Adjustments
Acquisition- Related Costs(1)
Certain Significant Items(2)
Non-GAAP Adjusted(b)
Cost of sales
$
549
$
(2
)
$
—
$
(4
)
$
543
Gross profit
1,322
2
—
4
1,328
Selling, general and administrative
expenses
409
(8
)
—
—
401
Amortization of intangible assets
40
(34
)
—
—
6
Restructuring charges and certain
acquisition-related costs
9
—
(5
)
(4
)
—
Income before provision for taxes on
income
687
44
5
8
744
Provision for taxes on income
129
10
1
2
142
Net income attributable to Zoetis
559
34
4
6
603
Earnings per common share attributable to
Zoetis–diluted
1.17
0.07
0.01
0.01
1.26
(a)
The condensed consolidated statements of
income present the three months ended March 31, 2022 and 2021.
Subsidiaries operating outside the United States are included for
the three months ended February 28, 2022 and 2021.
(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-related costs include the following:
Three Months Ended
March 31,
2022
2021
Integration costs(a)
$
2
$
3
Restructuring charges(b)
—
2
Total acquisition-related
costs—pre-tax
2
5
Income taxes(c)
1
1
Total acquisition-related costs—net of
tax
$
1
$
4
(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 exit and 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.
(2) Certain significant items include the following:
Three Months Ended
March 31,
2022
2021
Other restructuring charges and
cost-reduction/productivity initiatives(a)
$
2
$
7
Certain asset impairment charges
—
1
Other
(2
)
—
Total certain significant
items—pre-tax
—
8
Income taxes(b)
1
2
Total certain significant items—net of
tax
$
(1
)
$
6
(a)
For the three months ended March 31, 2022,
primarily represents product transfer costs, included in Cost of
sales.
For the three months ended March 31, 2021,
primarily represents product transfer costs, included in Cost of
sales, and employee termination costs related to cost-reduction and
productivity initiatives and the CEO transition, included in
Restructuring charges and certain acquisition-related costs.
(b)
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.
ZOETIS INC.
ADJUSTED SELECTED COSTS, EXPENSES
AND INCOME(a)
(UNAUDITED)
(millions of dollars)
Three Months Ended
March 31,
% Change
2022
2021
Total
Foreign Exchange
Operational(b)
Adjusted cost of sales
$
565
$
543
4
%
(4
)%
8
%
as a percent of revenue
28.4
%
29.0
%
NA
NA
NA
Adjusted SG&A expenses
458
401
14
%
(2
)%
16
%
Adjusted R&D expenses
122
118
3
%
(1
)%
4
%
Adjusted net income attributable to
Zoetis
625
603
4
%
(4
)%
8
%
(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-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 growth (a non-GAAP financial
measure) is defined as growth excluding the impact of foreign
exchange.
ZOETIS INC. 2022 GUIDANCE
Selected Line Items
(millions of dollars, except per share
amounts)
Full Year 2022
Revenue
$8,225 to $8,375
Operational growth(a)
9% to 11%
Adjusted cost of sales as a percentage of
revenue(b)
Approximately 29%
Adjusted SG&A expenses(b)
$2,050 to $2,100
Adjusted R&D expenses(b)
$535 to $555
Adjusted interest expense and other
(income)/deductions-net(b)
Approximately $250
Effective tax rate on adjusted
income(b)
Approximately 20%
Adjusted diluted EPS(b)
$4.99 to $5.09
Adjusted net income(b)
$2,365 to $2,420
Operational growth(a)(c)
10% to 13%
Certain significant items and
acquisition-related costs(d)
$20 to $30
The guidance reflects foreign exchange rates as of late April
2022.
Reconciliations of 2022 reported guidance to 2022 adjusted
guidance follows:
(millions of dollars, except per share
amounts)
Reported
Certain significant
items and
acquisition-related
costs(d)
Purchase accounting
Adjusted(c)
Cost of sales as a percentage of
revenue
~ 29.2%
~ (0.1)%
~ (0.1)%
~ 29%
SG&A expenses
$2,080 to $2,130
~ $(30)
$2,050 to $2,100
R&D expenses
$537 to $557
~ $(2)
$535 to $555
Interest expense and other
(income)/deductions-net
~ $250
~ $250
Effective tax rate
~ 20%
~ 20%
Diluted EPS
$4.65 to $4.77
$0.03 to $0.05
~ $0.29
$4.99 to $5.09
Net income attributable to Zoetis
$2,200 to $2,265
$20 to $30
~ $135
$2,365 to $2,420
(a)
Operational growth (a non-GAAP financial
measure) excludes the impact of foreign exchange.
(b)
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-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.
(c)
We do not provide a reconciliation of
forward-looking non-GAAP adjusted net income 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-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.
(d)
Primarily includes certain nonrecurring
costs related to acquisitions and other charges.
ZOETIS INC.
CONSOLIDATED REVENUE BY
SEGMENT(a) AND SPECIES
(UNAUDITED)
(millions of dollars)
Three Months Ended
March 31,
% Change
2022
2021
Total
Foreign Exchange
Operational(b)
Revenue:
Companion Animal
$
1,263
$
1,076
17
%
(3
)%
20
%
Livestock
705
779
(9
)%
(3
)%
(6
)%
Contract Manufacturing & Human
Health
18
16
13
%
(4
)%
17
%
Total Revenue
$
1,986
$
1,871
6
%
(3
)%
9
%
U.S.
Companion Animal
$
774
$
658
18
%
—
%
18
%
Livestock
246
275
(11
) %
—
%
(11
)%
Total U.S. Revenue
$
1,020
$
933
9
%
—
%
9
%
International
Companion Animal
$
489
$
418
17
%
(6
)%
23
%
Livestock
459
504
(9
)%
(6
)%
(3
)%
Total International Revenue
$
948
$
922
3
%
(5
)%
8
%
Companion Animal:
Dogs and Cats
$
1,199
$
1,016
18
%
(2
)%
20
%
Horses
64
60
7
%
(3
)%
10
%
Total Companion Animal Revenue
$
1,263
$
1,076
17
%
(3
)%
20
%
Livestock:
Cattle
$
364
$
399
(9
)%
(4
)%
(5
) %
Swine
154
190
(19
)%
(2
)%
(17
)%
Poultry
124
131
(5
)%
(3
)%
(2
)%
Fish
44
37
19
%
(4
)%
23
%
Sheep and other
19
22
(14
)%
(6
)%
(8
)%
Total Livestock Revenue
$
705
$
779
(9
)%
(3
)%
(6
)%
(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.
ZOETIS INC.
CONSOLIDATED REVENUE BY KEY
INTERNATIONAL MARKETS
(UNAUDITED)
(millions of dollars)
Three Months Ended
March 31,
% Change
2022
2021
Total
Foreign Exchange
Operational(a)
Total International
$
947.5
$
922.3
3
%
(5
) %
8
%
Australia
64.9
57.1
14
%
(7
)%
21
%
Brazil
76.8
73.6
4
%
(4
)%
8
%
Canada
49.0
46.1
6
%
—
%
6
%
Chile
41.2
34.0
21
%
(7
)%
28
%
China
102.7
123.2
(17
)%
1
%
(18
)%
France
31.9
34.9
(9
)%
(7
)%
(2
)%
Germany
43.1
38.4
12
%
(8
)%
20
%
Italy
30.4
25.1
21
%
(9
)%
30
%
Japan
59.1
46.7
27
%
(12
)%
39
%
Mexico
34.8
33.2
5
%
(3
)%
8
%
Spain
33.4
31.2
7
%
(8
)%
15
%
United Kingdom
63.5
69.1
(8
)%
(1
)%
(7
)%
Other developed markets
115.2
111.2
4
%
(5
)%
9
%
Other emerging markets
201.5
198.5
2
%
(10
)%
12
%
(a)
Operational revenue growth (a non-GAAP
financial measure) is defined as revenue growth excluding the
impact of foreign exchange.
ZOETIS INC.
SEGMENT(a) EARNINGS
(UNAUDITED)
(millions of dollars)
Three Months Ended
March 31,
% Change
2022
2021
Total
Foreign Exchange
Operational(b)
U.S.:
Revenue
$
1,020
$
933
9
%
—
%
9
%
Cost of Sales
185
184
1
%
—
%
1
%
Gross Profit
835
749
11
%
—
%
11
%
Gross Margin
81.9
%
80.3
%
Operating Expenses
165
131
26
%
—
%
26
%
Other (income)/deductions-net
—
1
*
*
*
U.S. Earnings
$
670
$
617
9
%
—
%
9
%
International:
Revenue
$
948
$
922
3
%
(5
)%
8
%
Cost of Sales
265
282
(6
)%
(6
)%
—
%
Gross Profit
683
640
7
%
(5
)%
12
%
Gross Margin
72.0
%
69.4
%
Operating Expenses
145
130
12
%
(6
)%
18
%
Other (income)/deductions-net
—
—
*
*
*
International Earnings
$
538
$
510
5
%
(6
)%
11
%
Total Reportable Segments
$
1,208
$
1,127
7
%
(3
)%
10
%
Other business activities(c)
(98
)
(97
)
1
%
Reconciling Items:
Corporate(d)
(259
)
(230
)
13
%
Purchase accounting adjustments(e)
(40
)
(44
)
(9
)%
Acquisition-related costs(f)
(2
)
(5
)
(60
)%
Certain significant items(g)
—
(8
)
*
Other unallocated(h)
(82
)
(56
)
46
%
Total Earnings(i)
$
727
$
687
6
%
(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 business.
(d)
Corporate includes, among other things,
certain costs associated with information technology,
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 certain
asset impairment charges, restructuring charges and implementation
costs associated with a shift in our organizational structure and
cost-reduction/productivity initiatives that are not associated
with an acquisition, costs associated with operational efficiency
initiatives 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220504006224/en/
Media: Bill Price 1-973-443-2742
(o) william.price@zoetis.com
Kristen Seely 1-973-443-2777 (o) kristen.seely@zoetis.com
Investor: Steve Frank
1-973-822-7141 (o) steve.frank@zoetis.com
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