Zoetis Outlines Strategy And Initiatives; Sees 2015 Profit Below View

(RTTNews) - Zoetis Inc.(ZTS) outlined strategy and initiatives underway that will drive growth and create value for shareholders. At an investor day meeting, the company also provided full-year 2015 financial guidance and outlined its longer term financial goals through 2017.

For full-year 2015, the company expects earnings per share to be between $1.36 and $1.43, Adjusted earnings per share of $1.61 - $1.68. Analysts polled by Thomson Reuters expect the company to report earnings of $1.71 per share for fiscal 2015.

The company projects revenue for fiscal 2015 to be between $4.850 billion to $4.950 billion, representing growth of 6.5% to 8.5% on an operational basis. Analysts expect revenues of $4.96 billion for fiscal 2015.

"Zoetis participates in an industry where revenues are expected to grow in the mid-single digits - 5% to 6% on an operational basis - over the long-term….And, we expect to grow our revenue in line with or faster than the market based on the combination of our industry-leading field-based resources, R&D and high quality supply," said Zoetis Executive Vice President and Chief Financial Officer Paul Herendeen.

"Below the revenue line, we expect to generate modest improvements in gross margin in the near term before accelerating after 2017. After 2015, we expect to keep our operating expense growth in the range of the inflation rate," said Herendeen.

The company believes it could grow adjusted net income in the low, double-digits over the long term.

The company indicated it could grow revenue in the range of 5% to 7% on an operational basis for 2016 and 2017, and grow adjusted net income in the range of 11% to 16% on an operational basis for 2016 and 2017.

Herendeen also outlined the company's priorities for capital allocation at the meeting: The company will aggressively manage its operating costs to drive revenue and support a complex growing business. It will use capital for value-creating business development activities that add to or complement its existing business base such as the purchase of assets of Abbott Animal Health, which the company announced yesterday, to generate additional shareholder value.

It will return capital to shareholders through continued dividend payments and the utilization of a $500 million share repurchase authorization, which was announced separately today.

ZTS closed Tuesday's regular trading at $44.19, down $0.04 or 0.09%. In after-hours, the share further declined $0.19 or 0.43%.