Zoetis' profit upgrade leaves most of its summer cut intact
The new outlook assumes less research spending and a lower tax rate. U.S. pet-health sales are still shrinking.
Zoetis raised its 2026 adjusted earnings forecast by 10 cents per share on November 5. That increase follows a much larger reduction in August.
Research by Ticker Byline shows that the midpoint of the new range is still about 9% below the May forecast. We compared the company's May, August and November earnings releases.
| Update | Expected earnings per share |
|---|---|
| May 7 | $6.85 to $7.00 |
| August 6 | $6.15 to $6.25 |
| November 5 | $6.25 to $6.35 |
Those adjusted figures remove specified costs, including acquisition-related accounting charges and restructuring expenses.
The company's U.S. pet-health business remains under pressure from competition and more price-sensitive customers. Sales fell 8% from a year earlier in Q3 2026, an improvement from Q2's 11% year-over-year decline.
What is lifting the target
Zoetis sells medicines, vaccines and diagnostic products and services for pets and livestock. It raised the lower end of its annual revenue outlook after results that management described as in line with expectations.
The November plan also assumes $15 million less in adjusted research spending than August's plan. The expected tax rate on adjusted income fell to about 20% from 20.5%.
Buybacks are helping per-share results. Compared with a year earlier, quarterly adjusted profit fell 5% to $720 million, yet adjusted earnings per share rose 3% to $1.75. A smaller share count spread that profit across fewer shares.
The reported earnings forecast moved the other way. Zoetis cut that 2026 range by 5 cents to $5.50 to $5.60 per share. The quarter included $89 million of asset write-downs, mostly on research projects acquired with PetMedix. Those charges are excluded from adjusted earnings.
A recovery that takes longer
Livestock revenue grew 7% from a year earlier in Q3, and overseas revenue rose 4%. Total sales still fell 1% to $2.4 billion.
For 2027, Chief Financial Officer James K. Saccaro said the company would plan without assuming an improvement in the economic backdrop or pet-owner spending. Competition is expected to remain a factor through most of the year.
Management expects limited revenue from new launches in 2027, with contributions building later in the year and into 2028. That leaves commercial execution and cost control doing much of the near-term work.