Shares of animal-health giant Zoetis (ZTS) rose to a 13-month high in early trading Wednesday after the company beat Q2 estimates and modestly raised its guidance.
Earnings grew 14% over the year-earlier quarter and beat analysts' consensus by 11%, while sales rose 3% and topped estimates by 3%. Zoetis' U.S. pet-care business did especially well, with 17% growth, helped by the canine itching treatment Apoquel, as well as the newly approved oral flea killer Simparica. International growth was more modest, partly as a result of the company's planned cutbacks for operating efficiency.
"Livestock revenues were also strong and the U.S. cattle business started recovering after a relatively weak performance in Q1, which was due to a mild winter and lower demand for Zoetis products in that segment," noted Evercore ISI analyst Mark Schoenebaum in an email.
The company added $25 million to its full-year sales guidance, now $4.8 billion to $4.9 billion. It also added 3 cents a share to its EPS range, now $1.86 to $1.93. That would mean just 7% earnings growth this year, a slowdown from previous years, but the company has guided a rebound in 2017, and that outlook remains unchanged.
Zoetis shares rose 3% to 51.21 on the stock market today.
IBD'S TAKE: Zoetis' move Wednesday brought it to a 52-week high, a bullish sign that IBD tracks with the New Highs list. That would preferably be accompanied by a high Relative Price Strength Rating, but Zoetis has a modest RS of 63.
