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Zoetis (ZTS) to Report Q1 Earnings: What's in the Cards?

Zacks Equity Research
·3 mins read

Zoetis Inc. ZTS is scheduled to report first-quarter 2020 results on May 6, before the market opens.

The company flaunts an excellent earnings surprise history, having surpassed expectations in each of the trailing four quarters by 7.83%, on average. In the last reported quarter, the company delivered a positive surprise of 4.55%.

Shares of Zoetis have decreased 3.6% in the year so far compared with the industry’s decline of 12.9%.

Let's see how things are shaping up for this announcement.

Factors to Consider

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

Solid sales from the dermatology portfolio strengthened the United States segment in the last reported quarter, a trend that most likely continued in the first quarter too. The company’s companion animal business has been performing well too.

ProHeart, Revolution and Simparica franchises including product introductions like Revolution Plus for cats and ProHeart 12 for dogs continue to drive growth for the companion animal portfolio. Key dermatology products like Apoquel and Cytopoint steadily boost sales, a trend that most likely continued in the first quarter as well.

However, sales of livestock products declined in the last reported quarter due to continued weakness across beef and dairy cattle sectors, a trend that might have persisted to reflect on the to-be-reported quarter’s sales.

Key Event to Note

In February 2020, Zoetis announced that the FDA approved Simparica Trio (sarolaner, moxidectin and pyrantel chewable tablets), the first once-monthly, chewable tablet in the United States that delivers all-in-one protection from heartworm disease, ticks and fleas, roundworms and hookworms.

We expect management to provide an update on the launch plans of Simparica Trio during the upcoming investors’ call.

What Our Model Indicates

Our proven model does not conclusively predict an earnings beat for Zoetis this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here as you will see below.

Earnings ESP: Zoetis has an Earnings ESP of -0.05%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company carries a Zacks Rank #3.

Zoetis Inc. Price and EPS Surprise

Zoetis Inc. Price and EPS Surprise
Zoetis Inc. Price and EPS Surprise

Zoetis Inc. price-eps-surprise | Zoetis Inc. Quote

Stocks to Consider

Here are some biotech stocks that have the right mix of elements to beat on earnings this time around:

Exact Sciences Corporation EXAS has an Earnings ESP of +2.28% and a Zacks Rank #2. The company is scheduled to release results on May 6. You can see the complete list of today’s Zacks #1 Rank stocks here.

Alexion Pharmaceuticals ALXN has an Earnings ESP of +1.08% and a Zacks Rank of 3. The company is scheduled to release results on May 6.

Alnylam Pharmaceuticals, Inc. ALNY has an Earnings ESP of +4.44% and is Zacks #3 Ranked. The company is scheduled to release results on May 6.

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