ZTS earnings analysis
What we found in ZTS's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Zoetis reported Q1 2026 revenues of $2.26 billion, a 3% increase from the previous year, but fell short of expectations with EPS of $1.53, down from $1.61 estimates. Segment performance showed U.S. revenue decline, especially in companion animal products, while international growth was strong, driven by livestock sales, as foreign exchange rates positively impacted revenue by $76 million.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue Growth Reflects FX Impact
- Total revenue increased by $64 million, or 3%, year-over-year, with an operational decline of 1%, benefitting from a $76 million foreign exchange increase.
- Strong International Segment Performance
- International segment revenue grew by $164 million, or 17%, driven by a 19% increase in livestock products, growing operationally by 12%.
- Adjusted EPS Growth
- Adjusted diluted EPS increased by 9% to $1.53, up from $1.41 in the prior period.
- Improved Gross Margin
- Gross margin improved slightly to 70.3% in Q1 2026 from 69.5% in Q1 2025.
- Decrease in SG&A Expenses
- SG&A expenses increased only 2%, reflecting controlled spending in the face of revenue headwinds.
- Higher R&D Investment
- Research and development expenses increased by 11%, from $162 million to $180 million, reflecting the company's focus on innovation.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- U.S. Revenue Decline
- U.S. revenue decreased by $93 million or 8%, primarily due to an 11% drop in companion animal product sales.
- Increased Interest Expenses
- Interest expense rose 15% to $62 million, impacted by a higher average debt balance.
- Restructuring Charges
- New restructuring charges of $22 million, primarily due to costs tied to employee terminations.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $1.53
- Gross margin
- 70.3%
- Segment
- U.S. Companion Animal: $865M, U.S. Livestock: $225M, International Companion Animal: $654M, International Livestock: $495M
What they said about what is next.
Full-year guidance revised due to competitive pressures, reflecting cautious optimism.
The filing reads worse than the one before it.
What came before.
- 10-K · February 13, 2025
- Zoetis positions itself as a global leader in animal health with a diversified portfolio across eight species and seven major product categories. For the year ended December 31, 2024 the company reported U.S. revenue of…
- 10-Q · August 6, 2024
- Zoetis reported Q2 revenue of $2,361 million, up $181 million (+8.3% YoY) and beating the consensus of $2,310 million. Diluted EPS was $1.37, modestly above prior quarter but down versus Q2 2023 ($1.45). Operating…
- 10-Q · May 4, 2023
- Zoetis reported Q1 revenue of $2,000 million, up $14 million versus Q1 2022, while diluted EPS declined to $1.19 from $1.26 a year ago. Operating income compressed (current period operating income $707 million vs prior…
- 10-Q · November 3, 2022
- Zoetis reported Q3 revenue of $2,002 million (vs. $1,990 million a year ago) and diluted EPS of $1.13 (vs. $1.16 a year ago). Companion animal sales were the driver, rising to $1,271 million while livestock fell to $708…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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