Zoetis Inc. (NYSE: ZTS), the world’s largest animal health company, reported stronger-than-expected first-quarter results Tuesday and sharply raised its full-year outlook, even as shares fell more than 3% in early trading.
The company posted adjusted earnings per share of $1.48 for the first quarter of 2025, up from $1.38 a year earlier and ahead of Wall Street’s consensus estimate of $1.39. Adjusted net income rose to $662 million, an 8% increase on an organic operational basis. Revenue climbed to $2.22 billion, topping analyst forecasts and representing a 1% year-over-year gain, or 9% on an organic operational basis.
Zoetis said the earnings beat was fueled by robust demand for its companion animal products, including Simparica Trio, its flagship flea, tick, and heartworm treatment, as well as key dermatology drugs Apoquel and Cytopoint. The company also saw strong sales of its monoclonal antibody therapies for osteoarthritis pain-Librela for dogs and Solensia for cats.
U.S. revenue reached $1.2 billion, up 2% from the prior year and 6% higher on an organic operational basis. The company said its international segment also contributed to growth, driven by increased demand for pet therapeutics and diagnostics.
Guidance Raised
On the back of its strong start to the year, Zoetis raised its full-year revenue guidance to a range of $9.425 billion to $9.575 billion, up from its previous forecast of $9.225 billion to $9.375 billion. The company also lifted its adjusted net income outlook to $2.775 billion to $2.825 billion, and now expects adjusted earnings per share of $6.20 to $6.30, up from prior guidance of $6.00 to $6.10. The company projects organic operational growth for both revenue and net income in the 6% to 8% range, compared to its earlier estimate of 5% to 7%.
Zoetis noted that its updated guidance reflects current foreign exchange rates and the impact of recently enacted tariffs.
Stock Reaction
Despite the upbeat results and improved outlook, Zoetis shares dropped 3.12% to $152.91 as of Tuesday afternoon. The stock has traded in a wide range over the past year, from a low of $139.70 to a high of $200.33.
Analysts say the post-earnings dip may reflect broader market caution and ongoing concerns about regulatory changes and competition in the animal health sector. Still, many remain optimistic about Zoetis’ long-term prospects, citing its leadership in innovative pet therapeutics and diagnostics.