Zoetis Q2 Earnings Beat Estimates, Revenues Miss, 2026 View Cut

Year to date, shares of Zoetis have plunged 40% compared with the industry’s decline of 3.7%.

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ZTS’ Q2 Results in Detail

Zoetis derives the majority of its revenues from a diversified product portfolio of medicines and vaccines used to treat and protect livestock and companion animals. The company reports business results under two geographical operating segments — the United States and International.

Revenues from the U.S. segment decreased 7% year over year to $1.30 billion in the reported quarter, missing the Zacks Consensus Estimate of $1.33 billion.

Sales of companion animal products in the U.S. region declined 11% year over year to $1.04 billion, owing to softer end-market demand and an increasingly competitive landscape. Zoetis’ key dermatology franchise and Simparica Trio faced heightened competitive pressure and persistent macroeconomic-driven price sensitivity. Also, generic competition for the Convenia and Cerenia brands, as well as lower sales of ZTS’ monoclonal antibody product for osteoarthritis (OA) pain, Librela, for dogs, resulted in the decline.

Sales of livestock products in the United States increased 23% in the quarter to $222 million. The increase was mainly due to broad-based strength across cattle and poultry products.

Revenues in the International segment increased 8% year over year on a reported basis and 6% on an operational basis to $1.17 billion, beating the Zacks Consensus Estimate of $1.14 billion.

Ex-U.S. sales of companion animal products rose 8% on a reported basis and 5% operationally to $664 million, driven by growth in the parasiticides portfolio, including Simparica Trio, along with contributions from Revolution and Stronghold. Growth was also supported by companion animal diagnostics and the OA pain portfolio, following the launches of Lenivia and Portela.

Livestock product sales increased 8% year over year on a reported basis and 6% operationally to $509 million, driven by growth in cattle and poultry.

ZTS’ 2026 Guidance

Zoetis lowered its revenue and earnings outlook for 2026.

The company now expects revenues to be in the range of $9.12 billion and $9.32 billion, reflecting an expected operational growth of negative 1-3%.

Previously, the company projected revenues between $9.68 billion and $9.96 billion, representing an expected operational growth of 2-5%.

Adjusted earnings are now expected in the range of $6.15-$6.25 per share in 2026, compared with the previous expectation of $6.85-$7.00 per share.

ZTS’ Zacks Rank and Stocks to Consider

Zoetis currently carries a Zacks Rank #4 (Sell).

Some better-ranked stocks in the biotech sector are Repligen RGEN and Liquidia Corporation LQDA, each currently sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Over the past 60 days, estimates for Repligen’s 2026 earnings per share have risen from $1.99 to $2.06, while estimates for 2027 have increased from $2.57 to $2.62 during the same time. RGEN shares have declined 3.4% year to date.

Repligen’s earnings beat estimates in each of the trailing four quarters, with the average surprise being 16.80%.

Over the past 60 days, estimates for Liquidia’s 2026 earnings per share have risen from $2.97 to $3.02, while estimates for 2027 have increased from $4.81 to $5.31 during the same time. LQDA shares have surged 158.4% year to date.

Liquidia’s earnings beat estimates in three of the trailing four quarters, while missing the same on the remaining occasion, with the average surprise being 54.40%.

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This article originally published on Zacks Investment Research (zacks.com).

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