Zoetis Q1 Adj Profit Tops View, But Revenues Miss: Backs 2014 Outlook

(RTTNews) - Zoetis, Inc. (ZTS), the former animal health business of Pfizer Inc. (PFE), reported Tuesday a profit fir the first quarter that grew eleven percent from last year, reflecting improved revenues. Adjusted earnings per share topped analysts' expectations by a penny, while quarterly revenues missed their estimates. The company also reaffirmed its earnings and revenue forecast for the full-year 2014.

"Despite some challenges in the first quarter, we grew sales operationally in three of our regional segments and across all our major species. Our performance in the U.S. and across emerging markets helped offset an operational decline in certain developed markets in Europe and Asia-Pacific," CEO Juan Ramón Alaix said in a statement.

The Florham Park, New Jersey-based company reported net income of $155 million or $0.31 per share for the first quarter, higher than $140 million or $0.28 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $191 million or $0.38 per share, compared to $179 million or $0.36 per share in the year-ago quarter.

On average, 12 analysts polled by Thomson Reuters expected the company to report earnings of $0.37 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter edged up 1 percent to $1.10 billion from $1.09 billion in the same quarter last year, but missed eight Wall Street analysts' consensus estimate of $1.13 billion.

Livestock revenues edged up to $706 million from $703 million last year, and companion animal revenue grew 1 percent to $380 million from $376 million a year ago. Contract manufacturing revenues remained flat with last year at $11 million.

Total U.S. revenue grew 6 percent to $479 million, while Europe/Africa/Middle East revenues declined 3 percent to $270 million, and Canada/Latin America revenue decreased 2 percent to $168 million from last year. Total Asia/Pacific revenues also slip 3 percent to $169 million from a year ago.

"In the first quarter, we continued to demonstrate an ability to grow adjusted earnings faster than sales despite a higher tax rate, cold weather in the U.S. impacting sales, and increased interest expense. Given our continued confidence in our business model, we are reaffirming our guidance for the full year," added Glenn David, Senior Vice President of Finance Operations and Acting CFO.

Looking ahead to fiscal 2014, Zoetis continues to expect adjusted earnings in a range of $1.48 to $1.54 per share, on projected revenues between $4.65 billion and $4.75 billion. Street is currently looking for full-year 2014 earnings of $1.53 per share, on annual revenues of $4.74 billion.

ZTS closed Monday's regular trading session at $30.53, up $0.11 on a volume of 4.43 million shares.