17. Earnings per Share
The following table presents the calculation of basic and diluted earnings per share:
Year Ended December 31,
(MILLIONS OF DOLLARS AND SHARES, EXCEPT PER SHARE DATA)202520242023
Numerator
Net income before allocation to noncontrolling interests$2,673 $2,496 $2,340 
Less: net income/(loss) attributable to noncontrolling interests 10 (4)
Net income attributable to Zoetis Inc.$2,673 $2,486 $2,344 
Denominator
Weighted-average common shares outstanding443.443 454.200 461.172 
Common stock equivalents: stock options, RSUs, DSUs and PSUs0.392 0.648 1.097 
Weighted-average common and potential dilutive shares outstanding443.835 454.848 462.269 
Earnings per share attributable to Zoetis Inc. stockholders—basic$6.03 $5.47 $5.08 
Earnings per share attributable to Zoetis Inc. stockholders—diluted$6.02 $5.47 $5.07 
The number of stock options outstanding under the company's Equity Plan that were excluded from the computation of diluted earnings per share, as the effect would have been antidilutive, were not material for the years ended December 31, 2025, 2024 and 2023.
For the convertible senior notes, we are required to settle the principal amount in cash and any conversion premium in excess of the principal amount in cash, shares of common stock, or a combination of cash and shares of common stock, at our election. As such, the convertible senior notes only have an impact on diluted earnings per share when the average share price of our common stock exceeds the conversion price. See Note 9. Financial Instruments.
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About Earnings Per Share Disclosures

The earnings per share disclosure breaks down the calculation from net income to both basic and diluted EPS, revealing the full impact of a company's capital structure on per-share economics. The reconciliation between basic and diluted share counts exposes how many stock options, RSUs, convertible securities, and warrants are potentially dilutive to existing shareholders.

Key signals: a widening gap between basic and diluted shares indicates growing dilution from equity compensation or convertible instruments. Anti-dilutive securities excluded from the diluted calculation deserve attention — they represent latent dilution that will materialize if the stock price rises. Watch for the effect of share buybacks on per-share metrics: EPS growth driven primarily by repurchases rather than income growth signals weakening fundamentals. Compare year-over-year changes in the diluted share count against equity compensation expense to assess whether management is effectively managing dilution.