Solventum Raises Full-Year Adjusted EPS After ERP Cutover

The Tip Desk · November 6, 2026 · 3 min read

The medical-technology company lifted 2026 adjusted EPS guidance to $7.20 to $7.30 after third-quarter sales of $1.9 billion and a 2.8% organic decline.

Solventum (SOLV) raised its full-year 2026 adjusted earnings outlook to $7.20 to $7.30 a share from $7.10 to $7.20 after third-quarter sales of $1.9 billion, down 7.0% from a year earlier, and organic sales fell 2.8%.

The medical-technology company said the organic decline reflected an expected 630 basis-point reversal of second-quarter 2026 advance orders placed ahead of a planned ERP system cutover completed in the third quarter. Reported sales had risen 2.2% and organic sales had risen 9.5% in the second quarter.

GAAP diluted earnings were a loss of $0.07 a share. Adjusted diluted earnings were $1.45 a share, down 3.6% from $1.50 a year earlier. Adjusted operating income margin compressed 70 basis points to 19.9%, which the company tied to the expected impact of those advance orders. GAAP operating income margin was 3.5%, down from 80.6% a year earlier, which the company attributed primarily to the prior year’s gain on sale of the purification and filtration business and higher current-year restructuring costs.

Chief executive Bryan Hanson said the company delivered third-quarter results ahead of its expectations, with every segment contributing, even as it completed its largest ERP cutover. He said Solventum expects to be near the top end of its full-year organic sales growth range. The company said it had exited about 90% of 3M transition service agreements and that ERP cutovers were complete.

Advanced Wound Care and Health Information Systems both posted positive organic growth. Sales rose 8.9% to $528 million, with 7.2% organic growth. Infection Prevention and Surgical Solutions sales fell 5.3% to $683 million, with a 5.7% organic decline. MedSurg sales were $1.21 billion, up 0.4% reported and down 2.8% organically. Dental Solutions sales declined 6.7% to $317 million, with a 7.4% organic decline. Health Information Systems sales rose 3.3% to $356 million, with 4.4% organic growth. Purification and Filtration contributed no sales after its September 2025 sale. All Other sales were $64 million, down 15.9% reported and 15.5% organically.

GAAP and adjusted gross margin both increased, which the company said was driven primarily by portfolio optimization, mix benefits and savings programs, partially offset by inflation and tariffs. GAAP selling, general and administrative expenses rose 4.2% to $813 million, which the company said was primarily due to higher operating expenses associated with restructuring.

Operating cash flow was $177 million and free cash flow was $97 million. The company said cash generation was ahead of expectations, driven by an IEEPA tariff refund.

Solventum is updating full-year 2026 organic sales growth toward the high end of a +2.5% to +3.0% range, or toward the high end of +3.5% to +4.0% excluding about 100 basis points of SKU exit impact. It is affirming free cash flow in the range of $200 million to $300 million.

The company received FDA 510(k) clearance for the combined use of Restrata and V.A.C. Therapy, which it said brings together two advanced wound care technologies and demonstrates continued progress integrating Acera Surgical’s technology into its Advanced Wound Care portfolio. Hanson said that with separation now more than 90% complete and growth drivers gaining momentum, the company is well positioned to accelerate sales growth and expand margins.