Eagan, Minn. – October 12, 2026 -- Solventum raised its full-year 2026 adjusted EPS guidance to $7.10-$7.20 and announced its intent to separate its Health Information Systems business, after second-quarter organic sales rose 9.5%.
Organic sales climb 9.5% while reported sales rise 2.2% to $2.2 billion
Second-quarter sales reached $2.2 billion, up 2.2% on a reported basis. Solventum attributed the organic gain primarily to volume and product mix, with all reportable segments performing strongly. The organic figure also includes the expected benefit of advance orders placed ahead of ERP cutovers.
GAAP diluted EPS was $0.53. Adjusted diluted EPS reached $2.55, a 50.9% increase.
IEEPA tariff refund lifts gross margin as legal and separation costs weigh on GAAP profit
GAAP and adjusted gross margin both increased, driven by an IEEPA tariff refund. Adjusted operating income margin also rose, helped by the refund and an ERP-timing benefit.
GAAP operating income margin fell, primarily due to net legal costs and separation and restructuring costs. GAAP SG&A increased on higher separation activity and net legal costs. Adjusted SG&A fell to 26.0% of sales, down 130 basis points from the prior year.
Free cash flow of $144 million beats expectations on tax timing and insurance proceeds
Operating cash flow was $227 million and free cash flow was $144 million. Solventum said both exceeded expectations, driven by the timing of tax payments and insurance proceeds.
Solventum raises organic growth, EPS and free cash flow outlook for 2026
The company increased its full-year organic sales growth range to +2.5% to +3.0%, from +2.0% to +3.0%. Excluding about 100 basis points of SKU exit impact, the range is +3.5% to +4.0%.
Adjusted EPS guidance moved to $7.10-$7.20, up from the upper end of the prior $6.40-$6.60 range. Free cash flow is now expected at $200 million to $300 million, versus a prior estimate of about $200 million.
Health Information Systems separation advances portfolio optimization phase
Solventum announced its intent to separate the Health Information Systems segment as part of the portfolio optimization phase of its transformation strategy. The company said the move would sharpen its focus as a dedicated MedTech company and allow both businesses to pursue distinct growth and innovation priorities.
CEO Bryan Hanson said the company remains on track to meet its long-term objectives. The company did not disclose a timeline or structure for the separation.
Foundation commits $350,000 to pediatric oral health program
The Solventum Foundation announced a $350,000 grant to America's ToothFairy. The funding is intended to expand oral health screenings, dental education and fluoride treatment for more than 100,000 children and caregivers in underserved communities over the next year.