Owens & Minor Beats Q3 Earnings Expectations, But Shares Dip on Revised Guidance
Owens & Minor Inc. (OMI) announced strong third-quarter 2024 results, exceeding both earnings and revenue expectations. The company reported adjusted earnings per share (EPS) of $0.42, topping the consensus estimate of $0.41. This marked a slight decrease from the $0.44 reported in the same period last year. Revenue for the quarter reached $2.72 billion, a 5% year-over-year increase, surpassing the consensus estimate of $2.68 billion.
The company’s Patient Direct segment, which focuses on home-based care products, saw a 6% year-over-year increase in revenue, driven by strong performance in diabetes and sleep supplies. Meanwhile, the Products & Healthcare Services segment, which includes Medical Distribution, recorded a 5% revenue growth, primarily attributed to strong same-store sales and an extra sales day.
Owens & Minor’s operating income for the third quarter reached $24 million, while adjusted operating income amounted to $84 million. Adjusted EBITDA increased by 5% to $142 million.
Positive Performance But Cautious Outlook
Despite these strong financial results, investors reacted negatively to the company’s revised full-year guidance. Owens & Minor lowered its revenue outlook for 2024 to $10.6 billion to $10.8 billion, compared to the prior guidance of $10.5 billion to $10.9 billion. The company also reduced its adjusted EPS guidance to $1.45 to $1.55, down from the previous range of $1.40 to $1.70.
Edward A. Pesicka, President & Chief Executive Officer of Owens & Minor, expressed confidence in the company’s performance. He highlighted the continued growth in the Patient Direct segment and the strong results in the Medical Distribution division. However, the revised guidance appears to have sparked concerns among investors about the company’s future growth prospects.
Market Reaction
Following the announcement, OMI stock experienced a significant decline, closing down 8.27% at $12.26 on Monday. The market reaction suggests that investors are prioritizing the revised guidance over the company’s strong third-quarter performance.
