Zoetis Q4 Results Top Estimates, Trims 2015 Revenue Outlook

(RTTNews) - Zoetis, Inc. (ZTS), the former animal health business of Pfizer, Inc. (PFE), reported Wednesday a profit for the fourth quarter that grew 20 percent from last year, reflecting revenue growth amid improved revenues across most operating segments and regions.

Both adjusted earnings per share and quarterly revenues topped analysts' expectations. The company also reaffirmed earnings guidance for the full-year 2015, while trimming annual revenue forecast range.

"We continued to see strong underlying growth in our business in the fourth quarter, and we see good sales momentum as we head into 2015, despite ongoing currency headwinds," CFO Paul Herendeen stated.

The Florham Park, New Jersey-based company reported net income of $126 million or $0.25 per share for the fourth quarter, higher than $105 million or $0.21 per share in the prior-year quarter.

Excluding items, adjusted net income for the quarter was $203 million or $0.40 per share, compared to $180 million or $0.36 per share in the year-ago quarter. On an operational basis, adjusted net income increased 12 percent, with foreign currency having a positive impact of 1 percentage point.

On average, 13 analysts polled by Thomson Reuters expected the company to report earnings of $0.36 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the quarter grew 5 percent to $1.32 billion from $1.25 billion in the same quarter last year, and topped ten Wall Street analysts' consensus estimate of $1.27 billion. Operational revenues increased 9 percent, excluding the impact of foreign currency.

Livestock revenues improved 7 percent or 11 percent operationally, to $904 million, and companion animal revenue grew 3 percent or 5 percent operationally, to $405 million from a year ago.

Meanwhile, contract manufacturing revenues decreased 31 percent or 23 percent operationally, to $11 million from last year.

Total U.S. revenue grew 14 percent to $589 million, Asia/Pacific revenues also edged up 1 percent or 4 percent operationally, to $187, and Canada/Latin America revenue grew 7 percent or 16 percent operationally, to $239 million from last year.

Meanwhile, total Europe/Africa/Middle East revenues decreased 6 percent or 1 percent operationally. to $294 million from a year ago.

"We completed a very successful year in 2014 as we continue to create value for shareholders, delivering operational growth of 7% in revenue and 13% in adjusted net income for the full year. We generated growth across all four of our regional segments for the year based on our market-leading franchises and the continued adoption of our newer products," CEO Juan Ramón Alaix said in a statement.

Looking ahead to fiscal 2015, Zoetis continues to expect adjusted earnings in the range of $1.61 to $1.68 per share, while trimming revenue guidance to between $4.80 billion and $4.90 billion from the previous projection between $4.85 billion and $4.95 billion.

Street is currently looking for full-year 2015 earnings of $1.65 per share, on annual revenues of $4.91 billion.

"We are updating our full year guidance for 2015 to reflect foreign exchange rates as of late January, the closing of the Abbott Animal Health transaction, and other changes in our operating assumptions for 2015. There continue to be opportunities to grow our revenue and improve our margins over the next few years as we finalize our manufacturing strategy and focus on continuous improvement in our operations," Herendeen added.

In Wednesday's regular trading session, ZTS is currently trading at $45.45, up $1.54 or 3.51% on a volume of 1.97 million shares.