Zoetis U.S. Pet Sales Fall 8% — Earnings Forecasts Move In Opposite Directions
The animal-health company raised its adjusted earnings outlook but cut its standard-accounting forecast as quarterly revenue slipped.
Zoetis, which makes medicines, vaccines and diagnostic products for pets and livestock, reported an 8% decline in U.S. pet-product sales Thursday as price sensitivity and competition hurt the business, according to results accompanying its SEC filing. Total third-quarter revenue fell 1% to $2.4 billion, both as reported and excluding currency effects and certain acquisitions and divestitures, while the company raised its adjusted earnings forecast and lowered its standard-accounting outlook.
Livestock Cannot Offset The Pet Decline
U.S. revenue fell 6% to $1.2 billion, while international revenue rose 4% to $1.1 billion; both changes were the same after excluding currency effects and certain deals. Zoetis attributed the U.S. pet decline to customers' sensitivity to prices, competition in dermatology medicines and generic alternatives.
The exposure is substantial: companion-animal products accounted for about 70% of Zoetis' 2025 revenue, compared with about 29% for livestock. The company sells to veterinarians, pet owners and livestock producers, with products sold in more than 100 countries.
Livestock sales grew 5% in the U.S., supported by cattle, swine and poultry. International livestock sales increased 8% as reported and 9% excluding currency effects and certain deals, with cattle and fish driving growth. International pet sales rose 1% as reported but were flat on the latter basis, as parasiticides and osteoarthritis pain treatments helped offset weaker dermatology sales.
Kristin Peck, Zoetis' chief executive officer, said in the earnings statement: "We remain focused on defending our position and directing our resources where they can have the greatest impact."
Fewer Shares, Higher Adjusted Per-Share Earnings
Net income dropped 18% to $591 million. Standard-accounting diluted earnings fell 12% to $1.44 per share, while adjusted net income declined 5% to $720 million as reported, or 7% excluding currency effects and certain deals.
Adjusted diluted earnings nevertheless increased 3% to $1.75 per share as reported, or 1% on the latter basis. The per-share comparison used a smaller share count: average diluted shares were 411.6 million, versus 443.2 million a year earlier.
The adjusted results excluded $129 million in purchase-accounting adjustments, deal-related costs and other significant items. Those exclusions included asset write-downs totaling $89 million, covering research assets bought with PetMedix in 2023 and site exits. Zoetis also recorded $30 million in restructuring and productivity-program charges, primarily employee termination costs.
ZTS shares fell about 3% to $79.68 in Friday trading.
A Higher Adjusted Outlook, More Charges
Zoetis raised its 2026 adjusted earnings forecast to $6.25–$6.35 per share from $6.15–$6.25. Its standard-accounting forecast moved down to $5.50–$5.60 from $5.55–$5.65.
Expected significant items and deal-related costs increased to approximately $210 million from approximately $150 million. The adjusted net income forecast rose to $2.600 billion–$2.640 billion from $2.570 billion–$2.620 billion.
The revenue range narrowed to $9.220 billion–$9.320 billion from $9.120 billion–$9.320 billion. Excluding currency effects and certain deals, Zoetis expects a full-year sales decline of 1%–2%, versus its previous 1%–3% decline forecast.
Product approvals offer a separate operational milestone. The FDA approved Convenia RTU for Dogs, a long-acting antibacterial injection, in October. Zoetis also launched Lenivia for dogs in Great Britain and received Swiss approval for Portela for cats; those osteoarthritis treatments can provide pain relief for up to three months from one injection.
Zoetis expects Convenia RTU for Dogs to be available to veterinarians in the first quarter of 2027.
Sources
- 8-K Filing — Zoetis Inc. (ZTS) — SEC EDGAR
- Exhibit exhibit99q32026.htm — Zoetis Inc. 8-K exhibit — SEC EDGAR
- Zoetis Lifts Annual Outlook While Braces For Cautious Pet Economy — benzinga.com
- Zoetis Announces Third Quarter 2026 Results; Highlights Progress Advancing Innovation Across Diversified Portfolio and Narrows Full Year 2026 Revenue Guidance, Raises Full Year 2026 Adjusted EPS Guidance – Company Announcement - FT.com — Financial Times
