Zoetis Inc (NYSE:ZTS) stock rose 2.87% (As on May 5, 11:24:10 AM UTC-4, Source: Google Finance) though the company reported weaker-than-expected sales in its largest business unit as distributors de-stocked on pet products. Revenue in the U.S. segment was $1.005 billion, a decrease of 1% compared with the first quarter of 2022. Sales of companion animal products decreased 7%, driven by distributor de-stocking across the portfolio as well as higher purchases in the fourth quarter of 2022 ahead of expected price increases and based on promotional activities. Sales of livestock products increased 15% in the quarter. Revenue in the International segment was $978 million, an increase of 3% on a reported basis and an increase of 10% operationally compared with the first quarter of 2022. Sales of companion animal products grew 3% on a reported basis and 10% operationally. Contributing to growth in the quarter were the company’s monoclonal antibody products for osteoarthritis pain — Librela for dogs and Solensia for cats — as well as Simparica Trio. Also contributing to growth in the quarter was key dermatology product Cytopoint and feline vaccines. Sales of livestock products grew 3% on a reported basis and 10% operationally. Growth in the company’s cattle portfolio was the result of increased sales in Australia and smaller emerging markets.

ZTS in the first quarter of FY 23 has reported the adjusted earnings per share of $1.31, beating the analysts’ estimates for the adjusted earnings per share of $1.26. The company had reported the adjusted revenue growth of 4 percent to $2 billion in the first quarter of FY 23, which is inline with the analysts’ estimates for revenue of $2.012 billion, according to Refinitiv. The veterinary drugmaker reported pet products revenue of $1.23 billion for the first quarter, below analysts’ estimates of $1.4 billion, according to Refinitiv. Zoetis sought to allay investor concerns over a hit to pet product sales from inflation and staffing shortages at pet clinics, saying that the quarterly miss was due to “short-term” factors and that demand from pet owners remained strong.

The company reiterated its annual forecast of adjusted profit between $5.34 and $5.44 per share, versus the analyst consensus of $5.40 and revenue in the range of $8.58 billion to $8.73 billion for the full year, versus the analyst consensus of $8.65B. Adjusted net income between $2.490 billion to $2.540 billion (operational growth of 7% to 9%).