Solventum Corporation raised its full-year profit forecast after second-quarter results that topped Wall Street estimates, driven by strength in surgical supplies and infection prevention.
The medical-products maker, spun off from 3M in April 2024, reported adjusted earnings of $2.10 a share for the three months ended June 30. Analysts had expected $1.96. Revenue came in at $2.13 billion, roughly in line with consensus. Organic growth hit 2.9%, Chief Executive Bryan Hanson told analysts on the call.
Solventum now expects full-year adjusted earnings of $8.05 to $8.25 a share, up from a prior range of $7.80 to $8.00. The company also narrowed its revenue forecast to $8.41 billion to $8.49 billion, from $8.36 billion to $8.54 billion.
"Our second-quarter performance reflects consistent execution across the portfolio," Hanson said. He pointed to market-share gains in wound care and higher volumes in the dental and health information systems units.
The company's adjusted operating margin expanded 80 basis points year over year to 25.3%. Cost-cutting initiatives under the "Solventum Transformation" program are starting to show results. Chief Financial Officer Wayde McMillan said the company expects to realize $100 million to $125 million in gross savings this year from the plan.
Free cash flow improved to $265 million from $182 million a year earlier, driven by lower inventory and better receivables collection. McMillan said the company is on track to generate roughly $1 billion in free cash flow for the full year.
Some analysts asked about the timing of a potential dividend reinstatement. Solventum suspended its payout after the spinoff to focus on debt reduction. Hanson said the board will revisit the question once leverage falls below 3.5 times EBITDA. Net debt stood at $6.9 billion at quarter-end, down from $7.5 billion at the end of 2025.
Wells Fargo analysts asked whether hospital budget pressures were showing up in Solventum's order patterns. Hanson said there was "no sign of a slowdown" in the acute-care channel, though the company was watching procurement trends closely. "Our customers are still prioritizing infection prevention and surgical efficiency," he said.
Solventum maintained its capital expenditure plan of about $200 million for the year and said it does not expect any further large restructuring charges beyond those already disclosed.
