In an August 4th release, Zoetis Inc. (ZTS) posted financial results for the 2nd quarter of FY 2022. The Company can be regarded as an indicator of the status of enterprises manufacturing pharmaceuticals, biologics and nutritional additives for companion animals and livestock industries in the Americas, Asia and Europe. Along with competitors Elanco, Phibro, Merck, and Boehringer-Ingelheim, all are subject to the risks of currency fluctuation, disruption of supply-chains and increased costs for products, labor and transport in a competitive environment with livestock producers and consumers impacted by inflation.
For the 2nd Quarter of FY 2022 ending June 30th 2022, net income attained $529 million on revenue of $2,052 million representing a net margin of 25.8 percent. Comparable figures for the 2nd quarter of fiscal 2021 ending June 30th were net income of $512 million on total revenue of $1,948 million. Diluted EPS attained $1.12 for the most recent quarter of fiscal 2022 compared to $1.07 for the 2nd Quarter of 2021.
In reviewing the components of revenue for the 2nd quarter of FY 2022 the Companion Animal Segment represented 66.6 percent of Company revenue with Livestock accounting for 32.5 percent. Within this segment, cattle comprised 49 percent; poultry, 18 percent; swine, 22 percent with aquaculture and other species contributing to the difference. Sales to the International segment of livestock amounted to 68 percent with the remainder derived from the U.S.
Zoetis expanded its poultry vaccine portfolio in the U.S. with the approval of Poulvac® Procerta® HVT-IBD-ND, a trivalent vector vaccine that protects against Marek’s disease, infectious bursal disease and Newcastle disease. This is the third recombinant vector vaccine from Zoetis, following the introduction of Poulvac® Procerta® HVT-ND in 2020 and Poulvac® Procerta® HVT-IBD in 2021.
In reviewing Q2 results Kristin Peck, CEO stated, “Zoetis delivered another strong quarter, with 8 percent operational revenue growth and 9 percent operational growth in adjusted net income, driven once again by the strength of our companion animal portfolio.” She added “Our diversity and strength across parasiticides, dermatology products, vaccines and monoclonal antibodies for pain continue to demonstrate people’s desire for innovative and effective care for their pets."
Ms. Peck concluded “Our business remains strong thanks to the durability of our global portfolio and a steady pipeline of new products. Even as we face uncertain macroeconomic conditions, continued supply constraints, generic competition and the war in Ukraine, we remain confident in the resilience of our business and colleagues. As we look at the rest of the year, we are updating and narrowing our guidance to reflect our positive outlook for the remainder of the year, as well as recent changes to foreign exchange rates."
Guidance for FY 2022 includes revenue in a range of $8,225 to $8.325 million; net income of $2,350 to $2,390 million and a reported diluted EPS ranging from $4.05 to $4.75.
On June 30th 2021 Zoetis posted assets of $13,770 million of which $4,257 million comprised intangibles and goodwill against long-term debt of $5,221 million. The Company had an intraday market capitalization of $84,790 million on August 5th 2022. ZTS traded with a forward P/E of 35.7 and has ranged over the past 52-weeks from $154.18 to $249.27 with a 50-day moving average of $171.49. Q2 operating margin was 37.1 percent. Return on assets was 3.8 percent. At close of trading on August 3rd pre-release ZTS was priced at $180.06 opening on August 4th post-release at $177.75.