Shares of Owens & Minor (NYSE:OMI) were skyrocketing 69.9% higher as of 11:36 a.m. EDT on Tuesday after rising as much as 94% earlier in the day. The huge jump came after the healthcare services company provided a preliminary second-quarter update that was much better than expected.
Owens & Minor expects to report adjusted earnings per share for Q2 of between $0.18 and $0.20. The average analysts' estimate projected an adjusted net loss of $0.03 per share. In addition, the company revised its full-year outlook for adjusted earnings to a range of $1 to $1.20 per share, up from its previous guidance of adjusted earnings between $0.50 and $0.60 per share.
Why is Owens & Minor anticipating a Q2 performance that blew away Wall Street expectations? The company stated that it should "benefit from improved productivity and increased manufacturing output in response to unprecedented demand for personal protective equipment, an earlier than expected increase in elective procedures across much of the country, favorable product mix, and operating efficiencies."
All of those cited factors are great news for Owens & Minor. Perhaps the most important one, though, is the faster rebound in volumes of elective procedures. This should translate to higher sales for many products in the company's catalog.
Owens & Minor is scheduled to announce its final Q2 results on Aug. 4, 2020. The update might not be as big of a catalyst for the healthcare stock as it would have otherwise been after the company's sneak peek today. Still, with shares of Owens & Minor now up more than 160% year to date, investors aren't likely to complain.