Personal Finance
OMI

Why Owens & Minor's Shares Crashed 17.5% Today

A man with his head down as mathematical formulas float above his head.

What happened

After the company reported second-quarter 2018 sales and earnings that fell shy of what industry watchers wanted, Owens & Minor 's (NYSE: OMI) shares lost 17.5% of their value on Tuesday.

So what

The medical supply company's second-quarter revenue and EPS clocked in at $2.46 billion and $0.32, respectively. The top line grew 8.4% from last year; however, it was still $10 million shy of Wall Street analysts' forecast. The EPS figure missed estimates by $0.14 per share.

A man with his head down as mathematical formulas float above his head.

IMAGE SOURCE: GETTY IMAGES.

The sales increase was helped by the acquisition of Byram Healthcare, which added $128 million in sales, and two months of revenue resulting from its acquisition of Halyard 's surgical and infection business, which contributed $136.9 million net of eliminations tied to sales to Owens & Minor's other businesses.

Now what

Owens & Minor is in the midst of a revamp that includes integrating those acquisitions in a way that shaves its costs and boosts its bottom line. The company's full-year guidance is for adjusted net income per diluted share of between $1.40 to $1.50, and management says it's "confident" in its "ability to achieve a double digit, year-over-year adjusted earnings growth rate next year."

Nevertheless, investors don't appear willing to give management the benefit of the doubt. In the past year, the company's been battling weaker pricing, margin headwinds, and supply bottlenecks. Perhaps a wait-and-see approach to this stock is warranted until the all-clear is sounded.

10 stocks we like better than Owens & Minor

When investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor , has quadrupled the market.*

David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now... and Owens & Minor wasn't one of them! That's right -- they think these 10 stocks are even better buys.

Click here to learn about these picks!

*Stock Advisor returns as of August 6, 2018

Todd Campbell has no position in any of the stocks mentioned. His clients may have positions in the companies mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy .

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

OMI

Other Topics

Stocks

Latest Personal Finance Videos

    #TradeTalks: The Changing E-Commerce Landscape

    e-Commerce Consultant James Thomson joins Jill Malandrino on Nasdaq #TradeTalks to discuss the changing e-commerce landscape, what consumers should prepare for as we head into shopping season and why you shouldn’t do last minute shipping.

    3 days ago

    The Motley Fool

    Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off.

    Learn More