Zoetis Inc. (ZTS – Free Report) is preparing to publish its results for the fourth quarter of 2018.

Zoetis' performance was impressive, with the company exceeding expectations in the previous four quarters, with an average average earnings surprise of 6.98%.

The evolution of Zoetis share price shows that the stock outperformed the sector last year. The stock rose 19.4%, compared with a decline of 16.4% in the sector.

Let's see how things are getting ready for this announcement.

Factors to consider

Zoetis derives most of its revenue from the diverse range of drugs and vaccines used to treat and protect livestock and pets. The company continues to strengthen its diversified product portfolio through life cycle innovations, strong client relationships and access to new markets and technologies.

The company's pet business is doing well. Apoquel and other product launches continue to boost the growth of the pet portfolio. Leading dermatology products Apoquel and Cytopoint, new products such as Simparica and Stronghold Plus, as well as increased medicalization rates in key international markets such as China and Brazil are expected to drive growth.

Zoetis is expected to generate more than $ 500 million in combined sales of Apoquel and Cytopoint in 2018. The oral parasite Simparica is expected to grow again. The company also expects to see more favorable conditions for livestock.

In July, Zoetis completed the acquisition of California-based Abaxis to expand its presence in the animal health diagnostic market, which represents a growing segment of the animal health industry. This should boost sales. In addition, updates on this acquisition are expected during the fourth quarter teleconference.

We expect the company to shed more light on other pipeline updates.

What our model says

Our proven model does not conclusively show that Zoetis should beat its profits in the reporting quarter. Indeed, the stock must have both a positive profit PSE and a # 1 (strong purchase), 2 (buy) or 3 (hold) Zacks rank to be able to outperform the estimates. But this is not the case here, as you will see below.

ESP earnings: Zoetis has a profit PSE of + 1.52%, the Zacks consensus estimate being 77 cents, while the most accurate estimate is 78 cents. You can discover the best stock to buy or sell before publishing with our earnings ESP filter.

Zacks Rank: Zoetis carries the rank 4 of the Zacks.

It is best to avoid stock classified for sale (ranks 4 or 5 of Zacks) entering a earnings announcement.

Stocks that warrant a look

Here are some actions to take into account, as our model shows that these combine the elements necessary to generate a profit higher than this quarter.

Acadia Pharmaceuticals Inc. (ACAD – Free Report) has a profit EPS of + 3.89% and a rank of Zacks # 3.

Aduro Biotech Inc. (ADRO – Free Report) has a profit EPS of + 15.23% and a rank of Zacks # 2.

Amicus Therapeutics Inc. (FOLD – Free Report) has a profit EPS of + 10.07% and a rank of Zacks # 3.

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