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Investing.com -- Shares of Owens & Minor, Inc. (NYSE:OMI) plunged 25% as the healthcare solutions company released preliminary financial results for the fourth quarter and full year ended December 31, 2024, that fell short of market expectations.
The company disclosed a net loss of $(311) to $(288) million for the fourth quarter, with an adjusted EBITDA of $135 to $140 million, which is below the consensus EBITDA of $155.5 million. Revenue for the quarter is expected to be between $2.67 and $2.70 billion, missing the consensus estimate of $2.72 billion. Furthermore, Owens & Minor anticipates a non-cash goodwill impairment charge of approximately $310 million within its Apria division, primarily due to a decline in the stock price and rising interest rates, as well as anticipated changes in pricing of a capitated contract.
For the full year 2024, the company expects revenue to range from $10.67 to $10.70 billion, and a net loss of $(378) to $(355) million. Adjusted earnings per share (EPS) are projected to be between $1.50 and $1.53.
Analysts have weighed in on the preliminary results, expressing concern over the company’s performance and the impact it may have on the pending acquisition of Rotech Healthcare Holdings, Inc. Michael Cherny of Leerink Partners, who maintains a market perform rating with a price target of $13.50, down from $14, stated, "The prelim earnings will likely create more questions about underlying margins given the adjusted Ebitda underperformance in the quarter." He also emphasized the importance of understanding the softer performance’s makeup ahead of the Rotech acquisition.
Daniel Grosslight from Citi, who has a buy rating on the stock, suggested that "the lower than expected results are largely due to the PD (Patient Direct) business," although he noted that the release lacked detailed information.
Owens & Minor’s President & Chief Executive Officer, Edward A. Pesicka, commented on the company’s top-line performance in 2024 and the growth of the Patient Direct segment, as well as the reduction of total debt by over $240 million during a year of significant reinvestment.
The company will host an investor conference call on Friday, February 28, 2025, to discuss the fourth quarter and full-year financial results in detail.
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