Zoetis Inc. reported Nov. 4 its financial results for the third quarter of 2014. The company reported revenue of $1.2 billion for the third quarter of 2014, an increase of 10% from the third quarter of 2013. Revenue reflected an operational increase of 10%, with foreign currency having no material impact on revenue growth this quarter.
Net income for the third quarter of 2014 was $166 million, or 33 cents per diluted share, an increase of 27%, compared to the third quarter of 2013. Adjusted net income for the third quarter of 2014 was $207 million, or 41 cents per diluted share, an increase of 20% and 21%, respectively, compared to the third quarter of 2013.
"In the third quarter, we generated 10% operational growth in revenue and 21% in adjusted net income, continuing to demonstrate our long-term value proposition of growing adjusted earnings faster than sales," Zoetis chief executive officer Juan Ramon Alaix said. "This quarter's performance was driven largely by 13% operational revenue growth in our livestock products and continued discipline around our operating expenses.
"All of our geographical segments benefited from the strong sales of livestock products in the quarter. We saw an increase in the use of our premium cattle products in key markets, as well as continued acceptance of new products in our swine and poultry portfolios," Alaix said. "Our overall companion animal product sales grew 5% operationally, reflecting strong sales of Apoquel in the U.S. and certain European markets. Meanwhile, we experienced increased competition and weaker performance in other companion animal products in the U.S., which somewhat offset double-digit operational growth for companion animal products in the (Canada & Latin America) and (Europe, Africa & Middle East) segments."
In the third quarter of 2014, revenue in the U.S. was $532 million, an increase of 7% compared to the third quarter of 2013. Sales of livestock products grew 12%, with cattle and swine being the main contributors. Growth in cattle products benefited from higher demand for our premium products as producers continued to see strong market conditions. Swine product sales were driven primarily by the successful launch of new products, which was slightly offset by the continued impact of porcine epidemic diarrhea virus (PEDV). Sales of companion animal products grew 2% driven by APOQUEL and other key brands, but this growth was offset by increased competition in vaccines, pain products and parasiticides.
Zoetis explained that it continues to advance animal health science through innovations that address unmet market needs or improve veterinarians' approach to treatment, including:
* In the third quarter, the U.S. Department of Agriculture granted Zoetis a conditional license for a vaccine to help fight PEDV in pigs. Zoetis began supplying the vaccine to veterinarians and pig farmers in September.
* Zoetis also received a full license from the USDA for its POULVAC Bron GA 08 vaccine for poultry, the first commercially available vaccine to help reduce disease caused by the Georgia 2008 Type infectious bronchitis virus. The vaccine had been conditionally licensed last fall, and advanced to full licensure in August.