Owens & Minor experienced a challenging start to 2025, as market reaction turned negative following flat revenue and a miss versus Wall Street’s top-line expectations. Management attributed the subdued results largely to external pressures, especially tariffs and adverse currency movements, which impacted the Products and Healthcare Services segment. CEO Edward Pesicka highlighted, “We can no longer absorb these costs,” referencing the significant tariff increases on imported medical products. Meanwhile, the Patient Direct segment posted notable growth, driven by increased investments in sleep therapy and sales resources, but this was not enough to offset broader headwinds.

Is now the time to buy OMI? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Owens & Minor’s Q1 Earnings Call

• John Stansel (JPMorgan) asked how customers are responding to tariff-related price increases. CEO Edward Pesicka explained that while the company is working to find alternative products for customers, they must pass on tariff costs due to low margins and cannot sell at a loss.
• Michael Cherny (Leerink Partners, via Ahmed) requested clarification on the $100–$150 million tariff exposure and its treatment in guidance. Pesicka confirmed this exposure is largely in the Products and Healthcare Services segment and will be passed through via price increases.
• Kevin Caliendo (UBS) inquired about the impact of Rotech acquisition financing and its effect on interest expense guidance. CFO Jonathan Leon noted that interest costs will be updated once the deal closes, and that current guidance does not yet reflect these changes.
• Eric Coldwell (Baird) questioned how the timing of tariff implementation and price increases aligns, and what happens if customers reject price hikes. Pesicka stated price increases are timed with inventory turnover and that the company cannot absorb tariffs, so alternatives or loss of sales may result.
• Eric Coldwell (Baird) also asked whether Rotech’s performance still aligns with acquisition expectations. Leon confirmed Rotech’s results are in line with the deal model, with anticipated accretion in the second year.

Catalysts in Upcoming Quarters

Looking ahead, our team will monitor (1) the effectiveness and customer acceptance of tariff-driven price increases, (2) the performance and integration of the Patient Direct segment as new therapies and revenue cycle initiatives scale, and (3) developments regarding the potential sale of the Products and Healthcare Services segment and the finalization of the Rotech acquisition. Execution on these fronts will be critical in shaping Owens & Minor’s business trajectory and financial health.

Owens & Minor currently trades at $7.96, up from $7.73 just before the earnings. In the wake of this quarter, is it a buy or sell? Find out in our full research report (it’s free).

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