Zoetis stock reversed its recent bad fortune Thursday, rising after the pet-drug maker beat first-quarter expectations, though the company trimmed its outlook for the year.
The company expects $9.05 billion to $9.2 billion in full-year sales. At the midpoint, that's down $25 million from Zoetis three-months-ago outlook. But the company called for better operational growth of 8.5% to 10.5%, an increase of 1.5% from the company's prior guidance.
Zoetis also cuts its adjusted earnings outlook by three pennies to $5.71 to $5.81 a share.
Both pieces of guidance are below analysts' forecast at the midpoint. But William Blair analyst Brandon Vazquez remained upbeat on the pet health stock.
"While we acknowledge there will likely be some debate around the stock, we view first-quarter results as a testament to Zoetis' innovative portfolio and ability to execute even in challenging macro times," he said in a report.
Zoetis stock jumped 5.5% to close at 167.23. Shares made a run for their 50-day line once the stock market opened, according to MarketSurge.
Zoetis Stock: Beat Comes From Pet Health
Overall, revenue climbed 10% to $2.19 billion, above expectations for $2.14 billion, FactSet shows. Adjusted earnings came in at $1.38 per share, rising 5% to beat the Street's call for $1.34 a share.
"Encouraging, the entire beat came from companion animal, which is a reversal of last year's livestock beat and companion animal misses," Vasquez said. He kept his outperform rating on Zoetis stock.
The strongest growth came from Zoetis' companion animal business where sales surged 18% to $1.45 billion. That easily beat analysts' projection for $1.37 billion. Livestock sales, on the other hand, slipped 5% to $720 million, undercutting the consensus forecast for $780 million.
Strength in the pet health business came down to Simparica Trio, Apoquel, Cytopoint, Librela and Solensia. Simparica Trio is an anti-parasite drug, Apoquel treats allergies, Cytopoint treats eczema in dogs and the latter two are arthritis treatments.
The growth in Solensia and Librela could be key for Zoetis. Last month, Zoetis stock hit the skids after a Wall Street Journal report suggested the company's arthritis shots had sickened dogs and cats.
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