🟡 Results
- Adj. EPS:
$1.87 (+5% YoY) ✅ - Revenue:
$2.5B (flat YoY) ⚠️ - Adj. Net Income:
$781M (-1% YoY) ⚠️ - Organic Operational Revenue:
-1% - Organic Operational Adj. Net Income:
-2%
📌 Key Takeaways
- U.S. revenue declined 7%, with Companion Animal sales down 11% due to softer clinic visits, pet owner price sensitivity and increased competition.
- U.S. Livestock remained strong, growing 23%.
- International revenue increased 8% reported (+6% organic), driven by parasiticides, diagnostics and new osteoarthritis products.
- Pipeline remains robust with 12+ potential blockbuster candidates.
- Acquisition of VitalRADS strengthens Zoetis' diagnostics ecosystem.
💬 Management
Management reaffirmed FY2026 guidance and remains focused on restoring U.S. growth while continuing to expand internationally and invest in innovation.
⚠️ Watchlist
- Weak U.S. Companion Animal trends.
- Dermatology franchise under pressure.
- Competitive environment for Librela and Simparica Trio.
- Execution of the recovery in the U.S. market.
🎯 Bottom Line
A mixed quarter. International operations continue to perform well and the long-term investment thesis remains intact, supported by a strong pipeline, industry-leading margins and excellent cash generation. However, U.S. weakness continues to weigh on overall growth, making the next few quarters critical to confirming a return to sustainable organic growth.