had solid third-quarter earnings, helped by good performance in its pet and livestock businesses.
Zoetis (ticker: ZTS) reported a profit of $1 a share, compared with 90 cents in the year-earlier period. Revenue grew year over year by 13% to $1.8 billion, excluding the impact of currency adjustments.
“Animal health is a steady and reliable sector even in times of economic hardship,” CEO Kristin Peck said during a conference call with analysts Thursday morning.
The stock was at $174.67, up slightly on the session.
Zoetis raised its outlook for revenue and earnings for the rest of the year. That included boosting its guidance for adjusted 2020 earnings to $3.76 to $3.81 a share, compared with earnings of $3.64 a share in 2019.
The company’s revenue guidance calls for a 7% to 8% pickup from 2019 levels, down slightly from a forecast of a 7% to 9.5% rise before the onset of Covid.
The companion animal, or pet, business had a strong quarter. The company’s Simparica Trio, a combination drug used as preventive for heartworm disease and to treat and control ticks, fleas, and intestinal nematodes in dogs, is expected to generate $125 million to $150 million of revenue this year, said CFO Glenn David. The chewable pill is administered monthly.
That drug was introduced in the U.S. earlier this year.
An even bigger revenue generator for the company is Apoquel, which treats atopic dermatitis in dogs and has generated $466 million of sales this year.
Peck said that in the U.S., veterinary clinic revenues per pet are increasing at double-digit rates. “While spending more time with their pets, pet owners are much more attuned to their dogs’ and cats’ health, observing conditions like itchiness, dermatitis and pain,” she said. “Pet owners are focusing again on wellness and chronic ailments, not just emergency visits and acute care.”
Global third-quarter sales for pet products came in at just under $1 billion, up 19%.
U.S. sales of pet products climbed 21%, compared with 17% internationally.
Global livestock sales totaled $768 million in the quarter, an increase of 5% and helped by cattle product sales, especially in the U.S.
Peck, however, called the overall livestock business globally “a longer-term recovery story.”
That business has come under some pressure and faced various disruptions related to Covid. For instance, many restaurants shut down or limited their offerings. That, in turn, has curtailed their demand for protein, among other factors.
China was a strong international market for Zoetis, with third-quarter sales totaling $65.6 million, up 64% year over year, including currency adjustments. Both the pet and livestock businesses performed well there.
The company suspended its share repurchases earlier this year due to the pandemic but it remains committed to its dividend. Zoetis last month declared a quarterly dividend of 20 cents a share, in line with its previous payouts.
The stock has gained about 32% this year, dividends included.
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