Solventum shares rise 3.6% after raising 2026 profit forecast
Solventum raised its 2026 adjusted EPS forecast to $7.20 to $7.30 from $7.10 to $7.20, and third-quarter adjusted EPS of $1.45 topped the $1.38 consensus estimate. Shares rose 3.6% at 3:59 p.m. ET.
Key takeaways
- Solventum (SOLV) reported third-quarter adjusted EPS of $1.45, which topped the $1.38 consensus estimate, and revenue of $1.95 billion, below the $1.97 billion estimate. The company raised its 2026 adjusted EPS forecast to $7.20 to $7.30 from $7.10 to $7.20.
Solventum (SOLV) shares rose 3.6% at 3:59 p.m. ET, from an $87.18 close. The company raised its full-year adjusted earnings per share forecast, and third-quarter adjusted EPS of $1.45 topped the $1.38 consensus estimate.
Revenue of $1.95 billion fell 7.0% from a year earlier. Organic sales decreased 2.8%, reflecting a 630 basis point reversal of prior-quarter advance orders placed ahead of an ERP system cutover in the current quarter.
Here's how the company did:
- Adjusted EPS: $1.45 vs. $1.50 a year earlier, against the $1.38 consensus estimate
- Revenue: $1.95 billion vs. $2.10 billion a year earlier, against the $1.97 billion consensus estimate
- GAAP diluted EPS: a loss of 7 cents vs. $7.22 a year earlier
Net loss was $12 million, versus net income of $1.27 billion a year earlier, which included a $1.52 billion gain on sale of business.
CEO Bryan Hanson said: "we expect to be near the top end of our full-year organic sales growth range, and are raising our full-year adjusted earnings per share outlook."
Full-year guidance
Adjusted EPS guidance rose to $7.20 to $7.30 from $7.10 to $7.20 set on Aug. 5.
Organic sales growth is expected toward the high end of +2.5% to +3.0%. Excluding about 100 basis points of SKU exit impact, growth is seen toward the high end of +3.5% to +4.0%.
Free cash flow guidance of $200 million to $300 million was affirmed.
Segment results
Advanced Wound Care sales rose 8.9% to $528 million. The company received FDA 510(k) clearance for the combined use of Restrata and V.A.C. Therapy.
MedSurg sales were $1.21 billion, up 0.4%. Health Information Systems sales rose 3.3% to $356 million. Dental Solutions fell 6.7% to $317 million, and Infection Prevention and Surgical Solutions fell 5.3% to $683 million.
Costs and cash
Selling, general and administrative expenses rose 4.2% to $813 million, driven by higher operating expenses tied to restructuring. Restructuring costs for the quarter were $50 million under the Transform for the Future program.
Operating cash flow was $177 million and free cash flow was $97 million, ahead of expectations, driven by an IEEPA tariff refund. Through nine months, the company bought back $403 million of treasury stock.
The company has exited about 90% of its transition service agreements with 3M, and its ERP system cutovers are complete.