Owens & Minor Earnings: Streak of Four Straight Profit Increases Snapped

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Owens & Minor Inc. (NYSE:OMI) reported its results for the third quarter. Owens & Minor is a distributor of medical and surgical supplies to the acute-care market and a healthcare supply-chain management company.

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Owens & Minor Inc. Earnings Cheat Sheet

Results: Net income for Owens & Minor Inc. fell to $24.6 million (39 cents per share) vs. $33.4 million (53 cents per share) a year earlier. This is a decline of 26.3% from the year-earlier quarter.

Revenue: Rose 0.1% to $2.18 billion from the year-earlier quarter.

Actual vs. Wall St. Expectations: Owens & Minor Inc. fell short of the mean analyst estimate of 51 cents per share. It fell short of the average revenue estimate of $2.23 billion.

Quoting Management: “With the third party logistics capabilities of the Movianto acquisition and our core U.S. hospital distribution and supply chain services business, Owens & Minor now has global reach with a solid platform for providing third party logistics and other supply chain services,” said Craig R. Smith, president & chief executive officer of Owens & Minor. “We believe this acquisition will improve the capacity of our company to serve healthcare providers and manufacturers with efficiency and innovation in a rapidly changing industry. We see emerging opportunity in healthcare and a widening path for Owens & Minor, as we position ourselves for the future.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the second quarter, net income rose 3.3% from the year earlier, while the figure increased 2.2% in the first quarter, 9.9% in the fourth quarter of the last fiscal year and 5.9% in the third quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 2.5% to $2.19 billion in the second quarter. The figure rose 4.4% in the first quarter from the year earlier and climbed 6.1% in the fourth quarter of the last fiscal year from the year-ago quarter.

The company has now come in under analyst forecasts for three quarters in a row. It missed the mark by one cent in the second quarter and by 2 cents in the first quarter.

Margins rose in the second quarter after falling the quarter before. Gross margin grew 0.5 percentage point from the year-earlier quarter to 10.5%. In the first quarter, the figure rose 0.5 percentage point to 9.7% from the year earlier quarter.

Looking Forward: Analysts have a more positive outlook for the company’s next-quarter performance. Over the past month, the average estimate for the fourth quarter has gone up from 52 cents per share to 53 cents. For the fiscal year, the average estimate has moved down from $1.99 a share to $1.98 over the last seven days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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