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Shares of Zoetis (NYSE: ZTS), the leading animal pharmaceutical company, were sliding today after its 2025 guidance came up short in its fourth quarter.

Though it topped estimates on the top and bottom lines, investors were more concerned about slowing growth into 2025.

As of 11:13 a.m. ET, the stock was down 6.5% on the news.

Q4 results were solid but not enough

Zoetis' revenue rose 5% in the quarter to $2.32 billion, edging out the consensus at $2.3 billion.

Organic operational growth, which adjusts for the divestiture of its medicated feed additive product portfolio and some water-soluble products, was up 9%. Still, fourth-quarter revenue growth represents a slowdown from the first three quarters of the year.

Growth was balanced between the U.S. and international segments with U.S. revenue growth up 4% and international up 6%. Its pet segment remained a source of strength, while sales in the smaller livestock products segment fell 3% to $726 million.

Gross margin improved to 69.5% from 67.1%, showing the company is improving its cost controls, and adjusted earnings per share (EPS) rose 13% to $1.40, beating estimates at $1.34.

CEO Kristin Peck said the company delivered "excellent full-year results in 2024, driven by the demand of our innovative products and the strength of our key franchises."

Guidance comes up short

Despite the solid fourth-quarter results, investors were turned off by the 2025 guidance calling for organic operational revenue growth of 6% to 8% in 2025. Without adjustments, that represents 2% to 4% growth to $9.225 billion to $9.375 billion, which is short of the consensus of $9.57 billion.

It also sees adjusted earnings per share of $6 to $6.10, which is up slightly from $5.92 in 2024 and below estimates at $6.30.

Initial full-year guidance tends to be conservative so investors shouldn't be alarmed by the weak EPS forecast. Still, the sell-off is understandable given that news.

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