Zoetis Inc. (ZTS) Bundle
A Brief History of Zoetis Inc.
Zoetis Inc. is a leading global animal health company that was established in 1952 as a subsidiary of the pharmaceutical giant, Pfizer Inc. It became an independent publicly traded company in 2013. As of 2024, Zoetis continues to expand its reach and product offerings, focusing primarily on medicines, vaccines, and diagnostics for both livestock and companion animals.
Financial Performance Overview
For the six months ending June 30, 2024, Zoetis reported total revenues of $4.551 billion, representing a 9% increase from $4.180 billion in the same period of 2023. The operational revenue growth, which excludes foreign exchange impacts, was approximately 12%.
| Financial Metric | 2024 (6 months) | 2023 (6 months) | Change (%) |
|---|---|---|---|
| Total Revenue | $4.551 billion | $4.180 billion | 9% |
| Net Income | $1.223 billion | $1.221 billion | 0% |
| Earnings per Share (EPS) | $2.68 | $2.64 | 1.5% |
| Gross Margin | 81.8% | 80.8% | 1% |
Revenue Breakdown
Zoetis's revenue is derived from both companion animals and livestock products. For the six months ending June 30, 2024, the revenue from these segments was:
| Segment | Revenue (2024) | Revenue (2023) | Change (%) |
|---|---|---|---|
| Companion Animal | $3.099 billion | $2.714 billion | 14% |
| Livestock | $1.414 billion | $1.429 billion | -1% |
Segment Performance
The performance of the operating segments for the second quarter of 2024 compared to the second quarter of 2023 shows:
| Segment | Revenue (Q2 2024) | Revenue (Q2 2023) | Change (%) |
|---|---|---|---|
| U.S. Companion Animal | $1.080 billion | $959 million | 13% |
| U.S. Livestock | $228 million | $206 million | 11% |
| International Companion Animal | $569 million | $530 million | 7% |
| International Livestock | $466 million | $465 million | 0% |
Operating Expenses
For the six months ending June 30, 2024, Zoetis reported operating expenses amounting to $1.128 billion, up 6% from the previous year. Key operating expenses included:
| Expense Type | Amount (2024) | Amount (2023) | Change (%) |
|---|---|---|---|
| Selling, General and Administrative | $1.128 billion | $1.061 billion | 6% |
| Research and Development | $333 million | $288 million | 16% |
| Cost of Sales | $1.311 billion | $1.195 billion | 10% |
Balance Sheet Highlights
As of June 30, 2024, Zoetis reported total assets of $14.165 billion, compared to $14.286 billion at the end of 2023. The company’s equity attributable to Zoetis Inc. stood at $4.966 billion.
| Balance Sheet Item | Amount (2024) | Amount (2023) |
|---|---|---|
| Total Assets | $14.165 billion | $14.286 billion |
| Total Liabilities | $9.205 billion | $9.295 billion |
| Stockholders’ Equity | $4.966 billion | $4.991 billion |
Future Outlook
Zoetis remains focused on expanding its portfolio through innovation and strategic acquisitions to drive growth in both existing and emerging markets. The company is also adapting to changing market dynamics, including currency fluctuations and regulatory changes, to maintain its competitive edge in the animal health sector.
A Who Owns Zoetis Inc. (ZTS)
Major Shareholders
As of June 30, 2024, the major shareholders of Zoetis Inc. include institutional investors and mutual funds. The following table summarizes the top shareholders:
| Shareholder | Shares Held (Millions) | Percentage Ownership (%) |
|---|---|---|
| The Vanguard Group, Inc. | 67.5 | 13.4 |
| BlackRock, Inc. | 56.4 | 11.2 |
| State Street Corporation | 26.1 | 5.2 |
| Fidelity Management & Research Company | 25.8 | 5.1 |
| Invesco Ltd. | 14.2 | 2.8 |
| Other Institutional Investors | 195.0 | 38.9 |
| Insider Holdings | 7.1 | 1.4 |
| Public Float | 150.0 | 29.8 |
Ownership Breakdown
The overall ownership structure of Zoetis Inc. as of June 30, 2024, can be detailed as follows:
| Ownership Type | Shares Held (Millions) | Percentage Ownership (%) |
|---|---|---|
| Institutional Investors | 368.0 | 73.6 |
| Insiders | 7.1 | 1.4 |
| Retail Investors | 123.9 | 24.8 |
Recent Changes in Ownership
During the second quarter of 2024, Zoetis announced a new share repurchase program of up to $6 billion. As of June 30, 2024, there was $623 million remaining under the previous share repurchase authorization of $3.5 billion.
Stock Performance
As of June 30, 2024, the stock price of Zoetis Inc. (ZTS) was approximately $275.00 per share. The market capitalization stood at around $138 billion.
Recent Financial Performance
For the six months ended June 30, 2024, Zoetis reported total revenue of $4.55 billion, a 9% increase from the previous year. Net income attributable to Zoetis Inc. was $1.223 billion.
Conclusion on Ownership Dynamics
The ownership of Zoetis Inc. reflects a strong institutional presence, with over 70% of shares held by institutional investors, indicating robust interest from large asset managers. Insider ownership remains low, suggesting a focus on external investment.
Zoetis Inc. (ZTS) Mission Statement
Company Overview
Zoetis Inc. is a global leader in the animal health industry, dedicated to the discovery, development, manufacture, and commercialization of medicines, vaccines, diagnostic products, and services for both companion animals and livestock. The company's mission is to empower those who raise and care for animals with the tools they need to enhance animal health and welfare.
Mission Statement
Zoetis aims to deliver quality products and services that meet the evolving needs of its customers in animal health. The mission statement emphasizes a commitment to innovation and sustainability, ensuring that animal health solutions are accessible and effective worldwide.
Financial Performance (2024)
In the second quarter of 2024, Zoetis reported total revenue of $2.361 billion, representing an 8% increase compared to $2.180 billion in the same period of 2023. For the first half of 2024, the revenue reached $4.551 billion, a 9% increase from $4.180 billion year-over-year.
| Financial Metric | Q2 2024 | Q2 2023 | Change (%) |
|---|---|---|---|
| Total Revenue | $2.361 billion | $2.180 billion | 8% |
| Net Income | $624 million | $670 million | (7%) |
| Operating Income | $780 million | $872 million | (11%) |
| Effective Tax Rate | 20.0% | 23.2% | (3.2%) |
Revenue Breakdown
The revenue growth in the second quarter was primarily driven by price increases and volume growth from new products. The operational revenue growth was composed of:
- Price growth: approximately 8%
- Volume growth from new products: approximately 3%
- Volume growth from key dermatology products: approximately 2%
- Volume decrease from other in-line products: approximately (2%)
Market Presence
Zoetis operates through two primary segments: U.S. and International. In the U.S., the companion animal products segment saw a revenue increase of $121 million, while livestock products contributed an additional $22 million. The international segment reported a revenue increase of $40 million, with companion animal products leading the growth.
| Segment | Revenue (Q2 2024) | Revenue (Q2 2023) | Change (%) |
|---|---|---|---|
| U.S. Companion Animal | $1.080 billion | $959 million | 13% |
| U.S. Livestock | $228 million | $206 million | 11% |
| International Companion Animal | $569 million | $530 million | 7% |
| International Livestock | $466 million | $465 million | 0% |
Research and Development
Zoetis continues to invest in research and development, reporting R&D expenses of $171 million in Q2 2024, up from $146 million in Q2 2023, reflecting a 17% increase. The company is focused on developing innovative solutions tailored to the needs of veterinarians and animal owners.
Dividends and Share Repurchase Program
As of June 30, 2024, Zoetis declared dividends of $0.432 per share, an increase from $0.375 per share in the prior year. The company has also initiated a new share repurchase program of up to $6 billion, which follows the previous authorization of $3.5 billion, with $623 million remaining under the older program as of mid-2024.
Balance Sheet Highlights
As of June 30, 2024, Zoetis reported total assets of $14.165 billion, down slightly from $14.286 billion at the end of 2023. The company maintained a strong equity position with total equity of $4.960 billion.
| Balance Sheet Item | June 30, 2024 | December 31, 2023 |
|---|---|---|
| Total Assets | $14.165 billion | $14.286 billion |
| Total Liabilities | $9.205 billion | $9.295 billion |
| Total Equity | $4.960 billion | $4.991 billion |
Conclusion
Zoetis Inc. remains committed to its mission of enhancing animal health through innovative products and services, as evidenced by its strong financial performance and ongoing investments in research and development.
How Zoetis Inc. (ZTS) Works
Company Overview
Zoetis Inc. (ZTS) is a global leader in animal health, providing a wide range of products for livestock and companion animals. The company operates in two primary segments: U.S. and International, focusing on the development and commercialization of veterinary medicines and vaccines, diagnostic products, and other services.
Financial Performance
As of June 30, 2024, Zoetis reported the following financial results:
| Financial Metrics | Three Months Ended June 30, 2024 | Three Months Ended June 30, 2023 | Change (%) | Six Months Ended June 30, 2024 | Six Months Ended June 30, 2023 | Change (%) |
|---|---|---|---|---|---|---|
| Total Revenue | $2,361 million | $2,180 million | 8% | $4,551 million | $4,180 million | 9% |
| Net Income | $624 million | $671 million | (7%) | $1,223 million | $1,221 million | 0% |
| Earnings Per Share (Diluted) | $1.37 | $1.45 | (6%) | $2.67 | $2.64 | 1% |
| Adjusted Net Income | $711 million | $652 million | 9% | $1,345 million | $1,259 million | 7% |
Revenue Breakdown
Revenue is derived from two main segments: Companion Animal and Livestock, with the following breakdown for the three months ended June 30, 2024:
| Segment | Revenue (Millions) | Change (%) |
|---|---|---|
| U.S. Companion Animal | $1,080 | 13% |
| U.S. Livestock | $228 | 11% |
| International Companion Animal | $569 | 7% |
| International Livestock | $466 | 0% |
| Total Revenue | $2,361 | 8% |
Cost Structure
For the three months ended June 30, 2024, the cost components were as follows:
| Cost Type | Amount (Millions) | Percentage of Revenue (%) |
|---|---|---|
| Cost of Sales | $668 | 28.3% |
| Selling, General and Administrative Expenses | $581 | 25% |
| Research and Development Expenses | $171 | 7% |
| Amortization of Intangible Assets | $35 | 1.5% |
Market Trends and Analysis
Zoetis has experienced significant growth driven by increased demand for its innovative products, particularly in the companion animal sector. The company reported a 12% increase in U.S. segment revenue for the first half of 2024, with a notable contribution from its monoclonal antibody products for osteoarthritis pain management.
International Operations
Internationally, revenue growth was impacted by foreign exchange fluctuations, which decreased revenue by approximately $61 million or 6%. Nonetheless, operational revenue increased by 10%, driven by strong sales in companion animal products.
Research and Development
Zoetis continues to invest in research and development, allocating $333 million for the six months ended June 30, 2024, which represents a 16% increase compared to the prior year.
Shareholder Returns
As part of its commitment to shareholder returns, Zoetis declared dividends of $0.432 per share for the quarter ended June 30, 2024, compared to $0.375 in the same quarter of the previous year.
Stock Repurchase Program
As of June 30, 2024, Zoetis had $623 million remaining under its authorized $3.5 billion share repurchase program, which was initiated in December 2021.
Tax and Compliance
The effective tax rate for the three months ended June 30, 2024, was 20.0%, a decrease from 23.2% in the same period of 2023, primarily due to lower net discrete tax expenses and a more favorable jurisdictional mix of earnings.
How Zoetis Inc. (ZTS) Makes Money
Revenue Streams
Zoetis Inc. generates revenue through the sale of animal health products, which are categorized into two primary segments: Companion Animals and Livestock.
Companion Animal Products
For the three months ended June 30, 2024, revenue from companion animal products was $1.649 billion, a 11% increase compared to $1.489 billion in the same period of the previous year. This growth was driven primarily by:
- Sales of mAb products for osteoarthritis pain, such as Librela and Solensia.
- Increased sales of key dermatology products.
- Sales growth from Simparica Trio.
Livestock Products
For the same period, revenue from livestock products was $694 million, reflecting a 3% increase from $671 million in the prior year. Key factors influencing this revenue included:
- Increased sales of cattle and swine products.
- Sales growth driven by better supply availability.
- Declines in poultry product sales due to lower medicated feed additive sales.
Geographic Breakdown
Revenue is also segmented geographically. The following table summarizes the revenue by geographic area for the six months ended June 30, 2024:
| Geographic Area | Revenue (Millions of Dollars) |
|---|---|
| United States | $2,471 |
| Australia | $156 |
| Brazil | $200 |
| Canada | $136 |
| China | $144 |
| Germany | $109 |
| United Kingdom | $150 |
| Other Emerging Markets | $450 |
| Total Revenue | $4,551 |
Cost Structure
For the three months ended June 30, 2024, the cost of sales was $668 million, representing 28.3% of total revenue. This is an increase from $607 million (27.8% of revenue) in the same period of 2023. The increase in costs was attributed to:
- Unfavorable manufacturing costs.
- Foreign exchange impacts.
- Price increases offsetting some of the cost increases.
Operating Expenses
Operating expenses for the three months ended June 30, 2024, totaled $581 million, which is 25% of revenue, up from $556 million (26%) in the prior year. The increase was due to:
- Higher selling, general, and administrative expenses.
- Increased research and development expenses of $171 million, up from $146 million.
Net Income
For the three months ended June 30, 2024, net income attributable to Zoetis Inc. was $624 million, a decrease from $671 million in the same period of 2023. This resulted in diluted earnings per share of $1.37 compared to $1.45 in the prior year.
Market Position and Strategy
Zoetis continues to focus on innovation in animal health, expanding its product portfolio through acquisitions and internal development. For instance, in 2023, Zoetis acquired PetMedix Ltd. for $111 million to enhance its capabilities in biopharmaceuticals for companion animals.
Future Outlook
Zoetis has announced a new $6 billion share repurchase program authorized in August 2024, reflecting confidence in its future cash flows and profitability. Furthermore, the company expects to continue its growth trajectory through new product launches and market expansions.
Financial Summary
The following table summarizes key financial metrics for Zoetis for the six months ended June 30, 2024:
| Metric | Value (Millions of Dollars) |
|---|---|
| Total Revenue | $4,551 |
| Net Income | $1,223 |
| Earnings per Share (Diluted) | $2.67 |
| Operating Expenses | $1,128 |
| Cost of Sales | $1,311 |
Zoetis remains a leader in the animal health industry, leveraging its extensive portfolio and continued innovation to drive growth and profitability.
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