Zoetis (ZTS) Q2 Earnings: How Key Metrics Compare to Wall Street Estimates

Zoetis (ZTS) reported strong Q2 2025 results, with revenue of $2.46 billion and EPS of $1.76, exceeding Wall Street estimates by 2.44% and 8.64% respectively, representing year-over-year increases of 4.2% and 12.8%. Performance was largely driven by robust growth in Contract Manufacturing & Human Health (+88.9% YoY) and Companion Animal products (+8.4% YoY), while the Livestock segment experienced an 8.1% year-over-year decline, notably in U.S. Livestock and Poultry. Despite the overall earnings beat, ZTS shares have underperformed the S&P 500 over the past month, returning -3.3%, and currently hold a Zacks Rank #3 (Hold).

Analysis

Zoetis (ZTS) delivered a solid Q2 2025 earnings beat, with revenue of $2.46 billion (+4.2% YoY) and EPS of $1.76, surpassing consensus estimates by 2.44% and 8.64%, respectively. The positive results were primarily driven by continued strength in the Companion Animal segment, which saw revenues climb 8.4% YoY to $1.79 billion, and a remarkable 88.9% YoY surge in the smaller Contract Manufacturing & Human Health division. However, this growth narrative is sharply contrasted by significant weakness in the Livestock segment, where revenue fell 8.1% YoY to $638 million. The decline was particularly acute in the U.S. Livestock division, which plummeted 21.1% YoY and missed analyst estimates, alongside a 22% drop in Poultry revenues. Despite the overall earnings outperformance, this sectoral weakness likely contributes to the stock's recent underperformance, having returned -3.3% over the past month against the S&P 500's +1% gain, and supports its current Zacks Rank #3 (Hold) rating.

Key Decisions for Investors

• Investors should weigh the robust, estimate-beating growth in the Companion Animal segment against the significant and ongoing deterioration in the Livestock business, where revenues fell 8.1% year-over-year.
• Closely monitor for any signs of stabilization or turnaround in the U.S. Livestock and Poultry sub-segments, as their respective 21.1% and 22% year-over-year revenue declines represent a material headwind to the company's overall growth profile.
• Given the conflicting performance between key divisions and the stock's recent underperformance, a neutral or hold position appears warranted until there is greater clarity on the trajectory of the struggling Livestock segment.