Please ensure Javascript is enabled for purposes of website accessibility

Why Owens & Minor Stock Popped 15% Today

By Rich Smith – Nov 3, 2021 at 12:55PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

It's a beat-and-raise quarter for Owens & Minor.

What happened

Shares of medical and surgical gear manufacturer Owens & Minor (OMI -0.40%) surged in Wednesday trading, rising 15.2% through 11:35 a.m. EDT after the company posted a big Q3 earnings beat this morning.

Instead of the $2.46 billion in sales and $0.55 per share in pro forma profit that Wall Street had expected, Owens & Minor reported $2.5 billion in sales and a $0.74-per-share profit.  

White arrowing pointing up on a green stock chart.

Image source: Getty Images.

So what

The details: Owens & Minor grew its sales 14% year over year and "continued on our path to a record setting year," said CEO Edward Pesicka. He made this prediction despite acknowledging an earnings decline of 9% year over year pro forma and 24% when calculated according to generally accepted accounting principles (GAAP).

In the midst of a continuing pandemic, the CEO boasted of Owens & Minor's "advantage of having Americas owned and operated manufacturing facilities" that help it to maintain supplies of "medical grade [PPE] products with minimal impact from global supply chain disruptions."

Now what

Looking ahead through the end of the year, management was able to narrow its previous forecast for pro forma earnings to a range of $3.90 to $4.10 per share. On the one hand, this is bad news because it eliminates the possibility Owens & Minor will max out its previous hope of earning as much as $4.25 per share. On the other hand, the entirety of the new guidance range sits above the $3.89-per-share profit that Wall Street had forecast.

Or in other words: After crushing earnings in Q3, Owens & Minor is ready to do it again in Q4.

Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.