Technically yes, but then there is the never-ever-mentioned-hidden-truth: we don't use "o" as often as English uses "it".
Oftentimes when you say "I know it", "Do you see it?", "give it back!", you'll find that, in Turkish, we don't use anything for the "it". We just say "I know", "Do you see?", "give back".
(Also, a tip for when you've advanced: You'll learn that "onu" is the object form of "o". But please don't use "onu" every time you see "it" in English. Your sentences will be grammatically okay, but also too heavy. It's usually a dead give away that you're a foreigner ;p So reduce the "onu"s and you can fool more people!)
In the context of your sentence, I think that if it were "it's fine", probably in Turkish we'd say "İyi, teşekkürler." (Unless we want to stress it like: "oh THAT thing is completely fine. I thought you were talking about something else.")
I'm not saying that "o" isn't used for objects. Not at all. But if you see "o", I'd say the chances that it represents he/she is a little higher than you might think. Just so you know. ;)
Yeah. It's exactly like the English "they". When I say "they" it can be a group of only men, only women, men & women mixed, agroup of animals, a group of objects. You can only tell from the context, no? It's the exact same thing in Turkish. The only difference is that in Turkish it's ambiguous in singular too. ;p