Zoetis lowered its 2026 revenue and earnings guidance after reporting a 5 percent drop in companion animal revenue in the second quarter, citing reduced clinic visits and pet owner price sensitivity. The animal health company now projects full-year revenue of $9.12 billion to $9.32 billion, down from prior guidance of $9.68 billion to $9.96 billion.
The announcement shows adjusted earnings per share guidance cut to $6.15 to $6.25 from $6.85 to $7.00. The midpoint of the new range implies a 10 percent decline from the original midpoint. Q2 adjusted EPS of $1.87 beat analyst estimates of $1.86, but net income of $781 million came in 1 percent below the $788 million consensus.
Companion Animal, Zoetis's largest segment at $1.7 billion in Q2 revenue, declined 5 percent year-over-year and fell short of the $1.77 billion estimate. The segment serves veterinary clinics and pet owners. U.S. revenue fell 7 percent in the quarter, though international markets grew 8 percent.
Livestock operations posted $731 million in Q2 revenue, up 12 percent year-over-year and beating the $679 million forecast. Diagnostics strength within that segment also contributed to results. Contract Manufacturing and Human Health revenue declined 12 percent to $29 million, missing expectations of $35 million.
Zoetis is the largest publicly traded animal health company by revenue and operates across companion animal pharmaceuticals, vaccines, diagnostics and devices. The guidance cut reflects a more pessimistic view of pet owner spending for the full year, with the company expecting the pressured companion animal market to persist through the remainder of 2026.
The second quarter results show organic operational revenue growth of negative 1 percent, with adjusted net income projected to decline 9 to 5 percent on an organic operational basis for the full year. Analyst estimates had implied flat to modest growth for the business.
