Zoetis Inc. (NYSE:ZTS), the world’s leading animal health company, today reported its financial results for the first quarter of 2026 on 7th of May 2026.
The company reported revenue of $2.3 billion for the first quarter of 2026, an increase of ONLY 3% compared with the first quarter of 2025 and FLAT on an organic operational basis. Net income for the first quarter of 2026 was $601 million, or $1.42 per diluted share, reflecting flat performance and growth of 6%, respectively, on a reported basis.
“The first quarter unfolded in a more challenging operating environment than we anticipated. Pet owners demonstrated increased price sensitivity, resulting in a decline in veterinary visits and softer demand for premium innovative products, where Zoetis leads. At the same time, competition intensified across key pet care categories, including dermatology and parasiticides. We are taking decisive action to sharpen commercial execution, unlock revenue and continue to drive disciplined cost management. The breadth of our portfolio remains a strength, reflected in the performance of International, livestock, and diagnostics in the quarter,” said Kristin Peck, Chief Executive Officer of Zoetis.
SEGMENT HIGHLIGHTS
Zoetis organizes and manages its commercial operations across two segments: United States (U.S.) and International. In the first quarter of 2026:
- Revenue in the U.S. segment was $1.1 billion, reflecting a RARE DECREASE of 8% on both a reported and an organic operational basis relative to the first quarter of 2025. This decrease was led by Companion animal product sales which DECREASED 11% due to softer end-market demand and an increasingly competitive landscape. The company’s key dermatology franchise and Simparica Trio® faced heightened competitive pressure from Cordelia Quattro of Elanco and persistent macroeconomic-driven price sensitivity.
- Also contributing to the decline was the impact of generic competition on the Convenia® and Cerenia® brands, as well as lower sales of Librela®, the company’s monoclonal antibody (mAb) product for osteoarthritis (OA) pain. Although Sales of livestock products INCREASED 7% on both a reported and organic operational basis in the quarter, supported by broad-based strength across cattle, poultry and swine but since Livestock Products’ sales are less than 20% of the overall business in US, this growth could not negate the significant drop in sales from Companion Animals’ Products. Cattle performance was driven primarily by favorable producer economics in beef cattle, supply timing and expanded targeted use of parasiticides in response to New World screwworm. Poultry performance benefited from increased vaccine sales tied to disease outbreak activity, while swine growth reflected improved supply for a key antibiotic product.
- Revenue in the International segment was $1.2 billion, a 17% INCREASE on a reported basis and a 10% increase on an organic operational basis compared with the first quarter of 2025. Companion animal product sales grew 15% on a reported basis and 7% on an organic operational basis, led by the company’s parasiticides portfolio, including Simparica Trio, along with contributions from diagnostics, vaccines, and the timing of price increases. These gains were partially offset by lower sales of key dermatology products, driven primarily by competitive dynamics. Sales of livestock products grew 19% on a reported basis and 14% on an organic operational basis, driven by broad-based growth across all core species including cattle, swine, poultry and fish reflecting strong end-market demand, supply recovery and the timing of price increases.
INVESTMENTS IN GROWTH
Zoetis’ pipeline has more than 12 potential blockbuster candidates across areas of significant unmet medical need including chronic kidney disease, oncology, cardiology, anxiety and obesity. The company remains on track to receive a significant approval in a major market every year for the next several years.
Advancing Livestock Innovation
As previously announced on March 2, Zoetis has entered into a definitive agreement with Neogen Corporation to acquire Neogen’s animal genomics business. This acquisition aligns with Zoetis’ strategy to drive future livestock innovation through genomics, reinforcing its commitment to livestock producers worldwide and accelerating its livestock genetics portfolio. With Neogen’s genomic technologies and data solutions, Zoetis will expand its capabilities to deliver predictive insights, individualized care, and greater value to customers across major livestock and companion animal species. Zoetis expects to complete the acquisition in the second half of 2026.
FISCAL YEAR ALIGNMENT
Effective January 1, 2026, Zoetis eliminated the one-month financial reporting lag by its subsidiaries operating outside of the U.S. and adjusted its year-end for all subsidiaries to December 31 (the “Fiscal Year Alignment”). Zoetis has retroactively applied the new accounting principle to prior financial statement periods, which will allow for a comparison of the financial results to historical operations.
MUTED FINANCIAL GUIDANCE
Zoetis is providing updated guidance based on the current operating environment and the presentation of its financials for Fiscal Year Alignment.
- Revenue of $9.680 billion to $9.960 billion (organic operational growth of 2% to 5%)
- Reported net income of $2.680 billion to $2.760 billion
- Adjusted net income of $2.870 billion to $2.950 billion (organic operational growth of 2% to 6%)
- Reported diluted EPS of $6.35 to $6.50
- Adjusted diluted EPS of $6.85 to $7.00
Muted guidance by Zoetis Management for rest of 3 Quarters of 2026 only highlights the growing pain ahead in its large Companion Animals segment for the company. Companion Animals’ segment contributed almost 70% of the global business in Q1′ 2026 and 82% of the overall US business highlighting. Slowdown in Companion Animals business in US is severely impacting its stock performance and ongoing competition from Elanco and MSD in JAK-Inhibitors segment is likely to [ersist for rest of 2026 leaving little scope for any recovery for Zoetis. Interesting times ahead….
