How did ZTS outperform forecasts in Q3 2024?

Zoetis Inc. (ZTS) outperformed forecasts in Q3 2024 primarily due to strong revenue growth in its companion animal operations and livestock products, coupled with favorable market conditions.

1. **Companion Animal Operations Performance**:
- Zoetis reported robust growth in its companion animal operations, which was a key driver for the company's performance in Q3 2024.
- The company's Simparica Trio, a flea, tick, and heartworm combination product, contributed significantly to this growth.
- Sales of livestock products increased by 11% in the quarter, primarily due to higher sales of cattle and swine products.
2. **Market Conditions and Demand**:
- The overall demand for pet treatments and animal health products has been on the rise, which benefited Zoetis's performance.
- The global pet medication market and pet dietary supplements market are expected to grow significantly, fueled by trends such as increasing pet adoption and a focus on pet health.
- The trend of pet humanization and the commercialization of pet care products have created a favorable environment for companies like Zoetis.
3. **Strategic Initiatives and Portfolio Performance**:
- Zoetis's key dermatology portfolio, including Apoqueland Cytopoint, has been performing well, contributing to the company's revenue.
- Internationally, the company saw a 4% revenue increase on a reported basis and a 10% operational increase, benefiting from growth in areas like Brazil and Europe.
4. **Financial Outlook and Analyst Confidence**:
- Despite Q3 2024 EPS estimates being lowered by William Blair, Zoetis's strong revenue performance and positive market trends suggest that the company's full-year revenue and profit forecasts may be met or exceeded.
- The company has raised its full-year operational revenue growth to 9% – 11% and operational growth in adjusted net income to 13.5% – 15.5%, indicating confidence in its future performance.

In summary, Zoetis's outperformance in Q3 2024 can be attributed to its strong performance in companion animal operations, favorable market conditions, strategic initiatives, and positive financial outlook.