Zoetis Inc. (ZTS) issued 2015 earnings guidance below expectations. Additionally, the company announced a $500 million shares repurchase program.
Excluding one-time items, earnings in 2015 are expected to be in the range of $1.61 to $1.68 per share, below the Zacks Consensus Estimate of $1.71. The company expects revenues to be between $4.85 billion and $4.95 billion. The Zacks Consensus Estimate is $4.94 billion, within the guided range. Zoetis expects revenues in 2016 and 2017 to grow in the range of 5% to 7% on an operational basis.
Apart from providing its 2015 outlook, the company announced that its Board of Directors has authorized a $500 million share repurchase program as part of its capital allocation plans. However, the company did not provide any specific timeline for the buyback.
Earlier this week, Zoetis announced that it has entered into an agreement with Abbott Laboratories (ABT) to buy the latter’s animal health assets for $255 million. The transaction is expected to close in the first quarter of 2015 (read more: Zoetis to Buy Abbott's Animal Health Assets for $255 Million).
We note that the 2015 guidance excludes any impact of the acquisition of assets of Abbott Animal Health.
Meanwhile, Valeant Pharmaceuticals International, Inc. (VRX) is rumored to be interested in acquiring the world leader in the $23 billion market for animal health medicines and vaccines, Zoetis.
Zoetis carries a Zack Rank #3 (Hold). Mylan, Inc. (MYL) and Valeant are better-ranked stock in the health care sector. Both carry a Zacks Rank #1 (Strong Buy).
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