Zoetis earnings show a split business as U.S. pet spending softens

Organic operational revenue strips out foreign-exchange swings and acquisition effects to show how fast a business is actually growing on its own. For Zoetis Inc. (NYSE: ZTS), that measure turned negative in fiscal Q2 2026, falling 1%, even as total reported revenue held flat at $2.5 billion. The animal-health company then cut its full-year 2026 revenue forecast to a range of $9.12 to $9.32 billion, down from its prior projection of $9.68 to $9.96 billion.

Where the business held

Livestock was the clear source of strength. Zoetis reported a 12% increase in livestock revenue on a reported basis, with U.S. livestock sales climbing 23% on both reported and organic measures. The company pointed to favorable beef-cattle economics, supply timing, and higher poultry-vaccine sales connected to disease outbreaks.

International performance added a second layer of resilience. Revenue outside the United States rose 8% on a reported basis and 6% organically to $1.2 billion. International companion-animal sales grew 5% organically, supported by parasiticides including Simparica Trio, Revolution and Stronghold, along with diagnostics and newer osteoarthritis treatments. The domestic weakness was not a global trend.

The U.S. companion-animal problem

The domestic pet business tells a different story. U.S. segment revenue fell 7% and companion-animal product sales dropped 11%. Zoetis attributed the decline to fewer veterinary-clinic visits, price sensitivity among pet owners, and increased competition. The dermatology portfolio weakened, Simparica Trio sales softened, generics cut into Cerenia and Convenia revenues, and Librela came in lower.

When pressure spreads across that many franchises at once, a single-product explanation no longer fits.

The guidance revisions spelled out the scale of the concern. Zoetis now expects organic operational revenue to decline 1% to 3% for the full year, a reversal from its prior forecast of 2% to 5% growth. Adjusted diluted EPS guidance moved from a range of $6.85 to $7.00 per share to $6.15 to $6.25 per share. Organic adjusted net-income growth went from a projected positive 2% to 6% to an expected decline of 5% to 9%.

Zoetis said its pipeline holds more than 12 potential blockbuster candidates, targeting chronic kidney disease, oncology, cardiology, anxiety and obesity. The company also launched Lenivia and Portela, long-acting osteoarthritis treatments offering dogs and cats up to three months of pain relief from a single injection. Its acquisition of VitalRADS added a veterinary teleradiology platform to the diagnostics business. The full-year adjusted diluted EPS range of $6.15 to $6.25 per share is what investors are working with for the rest of 2026.