Name: Zoetis Inc. (NYSE:ZTS) | Income Statement
Creator: Stock Analysis on Net

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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Zoetis Inc., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Revenue	8,544)	8,080)	7,776)	6,675)	6,260)
Cost of sales	(2,561)	(2,454)	(2,303)	(2,057)	(1,992)
Gross profit	5,983)	5,626)	5,473)	4,618)	4,268)
Selling, general and administrative expenses	(2,151)	(2,009)	(2,001)	(1,726)	(1,638)
Research and development expenses	(614)	(539)	(508)	(463)	(457)
Amortization of intangible assets	(149)	(150)	(161)	(160)	(155)
Restructuring charges and certain acquisition-related costs	(53)	(11)	(43)	(25)	(51)
Operating income	3,016)	2,917)	2,760)	2,244)	1,967)
Interest expense, net of capitalized interest	(239)	(221)	(224)	(231)	(223)
Royalty-related income	37)	4)	10)	12)	16)
Interest income	105)	50)	6)	12)	37)
Identifiable intangible asset impairment charges	(35)	(39)	(27)	(26)	—)
Other asset impairment charges	(1)	(7)	(3)	(4)	—)
Net gain on sale of businesses	101)	—)	—)	—)	—)
Net gain (loss) on sale of assets	—)	—)	(3)	19)	20)
Impairment of an equity investment	—)	—)	—)	(4)	—)
Foreign currency loss	(47)	(62)	(27)	(21)	(16)
Other, net	(1)	14)	(4)	(5)	—)
Other income (deductions), net	159)	(40)	(48)	(17)	57)
Income before provision for taxes on income	2,936)	2,656)	2,488)	1,996)	1,801)
Provision for taxes on income	(596)	(545)	(454)	(360)	(301)
Net income before allocation to noncontrolling interests	2,340)	2,111)	2,034)	1,636)	1,500)
Net loss attributable to noncontrolling interests	4)	3)	3)	2)	—)
Net income attributable to Zoetis Inc.	2,344)	2,114)	2,037)	1,638)	1,500)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

A consistent upward trajectory in top-line and bottom-line performance is observed over the five-year period from 2019 to 2023. Revenue expanded from 6,260 million US dollars to 8,544 million US dollars, representing a steady growth pattern. This growth in revenue is accompanied by a proportional increase in gross profit, which rose from 4,268 million US dollars to 5,983 million US dollars, indicating a strengthening of the core value proposition and effective cost management of sales.

Profitability and Margin Trends: Gross profit margins have expanded over the period, as the growth in revenue outpaced the increase in the cost of sales. Operating income demonstrated significant growth, rising from 1,967 million US dollars in 2019 to 3,016 million US dollars in 2023. This indicates strong operating leverage, as operating income grew at a faster rate than total revenue.
Operational Expenditure Analysis: Selling, general, and administrative expenses increased from 1,638 million US dollars to 2,151 million US dollars, while research and development expenses grew from 457 million US dollars to 614 million US dollars. The increase in R&D spending suggests a continued commitment to innovation and pipeline development. Despite these rising costs, the operational efficiency improved as evidenced by the increasing operating margin.
Non-Operating Items and Financials: Interest expenses remained relatively stable, fluctuating between 221 million and 239 million US dollars. A notable increase in interest income is observed in 2023, reaching 105 million US dollars. Furthermore, 2023 was marked by a net gain on the sale of businesses amounting to 101 million US dollars, which contributed to the overall increase in income before taxes.
Net Income and Taxation: Net income attributable to the company grew consistently from 1,500 million US dollars in 2019 to 2,344 million US dollars in 2023. The provision for taxes on income increased in tandem with pre-tax earnings, rising from 301 million US dollars to 596 million US dollars over the analyzed period.

The financial profile exhibits a high degree of stability and growth. The ability to increase net income while simultaneously expanding investments in research and development reflects a scalable business model with robust pricing power or market expansion capabilities.

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