ZTS · Zoetis Inc.

Zoetis Inc. reported first quarter 2026 results reflecting a challenging operating environment, with revenue of $2.3 billion growing 3% on a reported basis but flat organically compared to Q1 2025. U.S. segment revenue declined 8% to $1.1 billion, driven by an 11% drop in companion animal sales amid softer demand, price sensitivity, and competition in dermatology, parasiticides, Convenia, Cerenia, and Librela. Livestock sales in the U.S. provided an offset, rising 7% due to strength in cattle, poultry, and swine. International revenue reached $1.1 billion, up 17% reported and 10% organically, with companion animal up 7% organically led by parasiticides, diagnostics, and vaccines, and livestock up 14% organically across species. Adjusted net income rose 1% organically to $646 million, with adjusted diluted EPS up 7% organically to $1.53, excluding $45 million in purchase accounting and acquisition costs. CEO Kristin Peck noted increased price sensitivity reducing veterinary visits and premium product demand, alongside intensified competition, but highlighted portfolio breadth and a pipeline of over 12 potential blockbusters. The company revised full-year 2026 guidance downward to revenue of $9.680-$9.960 billion (2-5% organic growth), adjusted net income of $2.870-$2.950 billion (2-6% organic growth), and adjusted diluted EPS of $6.85-$7.00, reflecting Fiscal Year Alignment eliminating the one-month reporting lag and current conditions including $100 million International revenue timing benefit. Investments include Neogen genomics acquisition expected H2 2026 and recent approvals for Convenia in Canada, Apoquel Chewable in Thailand, and livestock products in Japan.