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SOLV's Q3 adjusted EPS of $1.45 beat estimates by 7.41%, while revenues fell 7% to $1.95 billion.
ERP-related order reversals dragged SOLV's organic sales down 2.8%, masking normalized growth of nearly 4%.
SOLV raises its 2026 adjusted EPS outlook to $7.20-$7.30 as ERP cutovers conclude and HIS separation advances.
Solventum Corporation (SOLV - Free Report) reported third-quarter 2026 adjusted earnings per share (EPS) of $1.45, which beat the Zacks Consensus Estimate of $1.35 by 7.41%. However, the bottom line declined 3.6% year over year.
GAAP loss per share was 7 cents against earnings of $7.22 in the year-ago quarter.
SOLV's Sales Decline on ERP Order Reversal
Revenues of $1.95 billion declined 7% year over year and missed the consensus mark of $1.97 billion by 1.07%. Organic sales decreased 2.8%, reflecting the expected reversal of approximately $125 million in advance orders placed during the second quarter ahead of enterprise resource planning (ERP) system cutovers.
The advance-order reversal created a 630-basis-point headwind to organic growth. Excluding this impact, organic sales have increased 3.5%. Management estimated normalized organic growth of approximately 4%, including adjustments for 90 basis points of SKU rationalization headwinds.
Reported sales reflected a 30-basis-point currency benefit and a 450-basis-point headwind from acquisitions and divestitures, primarily attributable to the September 2025 sale of the Purification and Filtration business, partly offset by the Acera acquisition.
Solventum's MedSurg Sales Show Mixed Trends
MedSurg revenues totaled $1.21 billion, up 0.4% on a reported basis but down 2.8% organically. ERP-related advance-order timing created an estimated 710-basis-point headwind to organic growth.
Advanced Wound Care revenues increased 8.9% year over year to $528 million, with organic growth of 1.5%. Performance benefited from negative pressure wound therapy products, including Prevena and V.A.C. Peel and Place. Acera contributed $35 million in revenues and recorded 35% growth.
Infection Prevention and Surgical Solutions revenues declined 5.3% year over year to $683 million, while organic sales decreased 5.7%. The advance-order reversal weighed on performance, partly offset by demand for IV-site and temperature management solutions.
SOLV's Dental Sales Fall While HIS Maintains Growth
Dental Solutions revenues declined 6.7% year over year to $317 million, while organic sales decreased 7.4%. ERP-related order timing created approximately 1,010 basis points of pressure on organic growth.
New product launches and commercial execution supported underlying demand, particularly in core restoratives. Management highlighted continued traction for Clinpro Clear, Filtek Easy Match and Clarity aligner attachments.
Health Information Systems (HIS) revenues increased 3.3% year over year to $356 million, with organic growth of 4.4%. Revenue cycle management solutions benefited from continued adoption of 360 Encompass, international expansion and healthy customer retention.
Solventum Q2 Margin Analysis
Adjusted gross profit totaled $1.11 billion compared with approximately $1.17 billion in the prior-year quarter. Adjusted gross margin expanded 120 basis points to 57.1%, supported by portfolio optimization, cost savings and operating improvements, partially offset by inflation and tariffs.
Adjusted operating expenses declined $14 million year over year to $725 million, reflecting portfolio changes and savings initiatives, partly offset by investments supporting growth.
Adjusted operating income totaled $387 million compared with approximately $430 million a year ago. Adjusted operating margin contracted 70 basis points to 19.9%, primarily reflecting a 250-basis-point ERP timing headwind. Excluding this impact, management estimated operating margin of approximately 22.3%.
Solventum Corporation Price, Consensus and EPS Surprise
Solventum exited the third quarter with cash, cash equivalents and investments of $451 million compared with $403 million in the previous quarter.
Total assets stood at $14.2 billion, unchanged as compared with the previous quarter.
Cumulative net cash provided by operating activities at the end of third-quarter 2026 was $215 million compared with $274 million in the year-ago period.
Solventum Raises Its 2026 Earnings Outlook
Solventum increased its adjusted EPS guidance to $7.20-$7.30 from the previous range of $7.10-$7.20. Management expects organic sales growth toward the high end of its 2.5-3% range, or 3.5-4% excluding SKU rationalization.
The company reaffirmed its free cash flow guidance of $200-$300 million and expects adjusted operating margin toward the high end of 22.2-22.7%.
Solventum also completed its major ERP cutovers and exited more than 90% of its transition service agreements with 3M. The planned HIS separation remains on track as management evaluates sale and spin-off alternatives to sharpen its MedTech focus.
Our Take
Solventum delivered a mixed third-quarter 2026, with earnings surpassing the Zacks Consensus Estimate while revenues fell short. Despite the reported sales decline, underlying demand remained healthy, supported by new product launches and stronger commercial execution. MedSurg benefited from negative pressure wound therapy and IV-site management products. Dental Solutions gained from innovation in core restoratives, while HIS maintained momentum in revenue cycle management solutions.
However, reported sales were impacted by the expected reversal of approximately $125 million in advance orders placed during the second quarter ahead of ERP cutovers. Management estimated normalized organic growth of approximately 4% compared with the reported 2.8% decline. Adjusted operating margin contracted 70 basis points year over year to 19.9%, reflecting the ERP-related timing headwind. Excluding this impact, management estimated an adjusted operating margin of approximately 22.3%. Inflation and tariffs continued to pressure profitability, although cost savings and portfolio optimization provided some relief.
Solventum continued to make progress on its transformation and portfolio strategy. The company completed its major ERP cutovers and exited more than 90% of its transition service agreements with 3M. The planned HIS separation remains on track and is expected to sharpen its focus on MedSurg and Dental Solutions. Acera remained a bright spot, supported by strong growth and the FDA clearance for the combined use of Restrata and V.A.C. Therapy.
SOLV’s Zacks Rank and Key Picks
Solventum currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are OPKO Health (OPK - Free Report) , Intuitive Surgical (ISRG - Free Report) and Globus Medical (GMED - Free Report) .
OPKO Health, currently flaunting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2026 adjusted loss of 1 cent per share, which surpassed the Zacks Consensus Estimate by 87.5%. Revenues of $163.6 million beat the Zacks Consensus Estimate by 24.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
OPK has an estimated earnings growth rate of 23.3% for 2026. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 95.1%.
Intuitive Surgical, currently carrying a Zacks Rank #2 (Buy), reported third-quarter 2026 adjusted EPS of $3.00, which beat the Zacks Consensus Estimate by 13.6%. Revenues of $3.05 billion surpassed the Zacks Consensus Estimate by 4.9%.
Intuitive Surgical has a long-term estimated growth rate of 14.9%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.1%.
Globus Medical, currently carrying a Zacks Rank #2, reported a second-quarter 2026 adjusted EPS of $1.34, which surpassed the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million beat the Zacks Consensus Estimate by 0.4%.
GMED has an estimated long-term earnings growth rate of 12.4%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 27.9%.
View the Zacks #1 Rank List
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SOLV Q3 Earnings Beat Estimates Despite ERP-Related Revenues Decline
Key Takeaways
Solventum Corporation (SOLV - Free Report) reported third-quarter 2026 adjusted earnings per share (EPS) of $1.45, which beat the Zacks Consensus Estimate of $1.35 by 7.41%. However, the bottom line declined 3.6% year over year.
GAAP loss per share was 7 cents against earnings of $7.22 in the year-ago quarter.
SOLV's Sales Decline on ERP Order Reversal
Revenues of $1.95 billion declined 7% year over year and missed the consensus mark of $1.97 billion by 1.07%. Organic sales decreased 2.8%, reflecting the expected reversal of approximately $125 million in advance orders placed during the second quarter ahead of enterprise resource planning (ERP) system cutovers.
The advance-order reversal created a 630-basis-point headwind to organic growth. Excluding this impact, organic sales have increased 3.5%. Management estimated normalized organic growth of approximately 4%, including adjustments for 90 basis points of SKU rationalization headwinds.
Reported sales reflected a 30-basis-point currency benefit and a 450-basis-point headwind from acquisitions and divestitures, primarily attributable to the September 2025 sale of the Purification and Filtration business, partly offset by the Acera acquisition.
Solventum's MedSurg Sales Show Mixed Trends
MedSurg revenues totaled $1.21 billion, up 0.4% on a reported basis but down 2.8% organically. ERP-related advance-order timing created an estimated 710-basis-point headwind to organic growth.
Advanced Wound Care revenues increased 8.9% year over year to $528 million, with organic growth of 1.5%. Performance benefited from negative pressure wound therapy products, including Prevena and V.A.C. Peel and Place. Acera contributed $35 million in revenues and recorded 35% growth.
Infection Prevention and Surgical Solutions revenues declined 5.3% year over year to $683 million, while organic sales decreased 5.7%. The advance-order reversal weighed on performance, partly offset by demand for IV-site and temperature management solutions.
SOLV's Dental Sales Fall While HIS Maintains Growth
Dental Solutions revenues declined 6.7% year over year to $317 million, while organic sales decreased 7.4%. ERP-related order timing created approximately 1,010 basis points of pressure on organic growth.
New product launches and commercial execution supported underlying demand, particularly in core restoratives. Management highlighted continued traction for Clinpro Clear, Filtek Easy Match and Clarity aligner attachments.
Health Information Systems (HIS) revenues increased 3.3% year over year to $356 million, with organic growth of 4.4%. Revenue cycle management solutions benefited from continued adoption of 360 Encompass, international expansion and healthy customer retention.
Solventum Q2 Margin Analysis
Adjusted gross profit totaled $1.11 billion compared with approximately $1.17 billion in the prior-year quarter. Adjusted gross margin expanded 120 basis points to 57.1%, supported by portfolio optimization, cost savings and operating improvements, partially offset by inflation and tariffs.
Adjusted operating expenses declined $14 million year over year to $725 million, reflecting portfolio changes and savings initiatives, partly offset by investments supporting growth.
Adjusted operating income totaled $387 million compared with approximately $430 million a year ago. Adjusted operating margin contracted 70 basis points to 19.9%, primarily reflecting a 250-basis-point ERP timing headwind. Excluding this impact, management estimated operating margin of approximately 22.3%.
Solventum Corporation Price, Consensus and EPS Surprise
Solventum Corporation price-consensus-eps-surprise-chart | Solventum Corporation Quote
SOLV’s Financial Position
Solventum exited the third quarter with cash, cash equivalents and investments of $451 million compared with $403 million in the previous quarter.
Total assets stood at $14.2 billion, unchanged as compared with the previous quarter.
Cumulative net cash provided by operating activities at the end of third-quarter 2026 was $215 million compared with $274 million in the year-ago period.
Solventum Raises Its 2026 Earnings Outlook
Solventum increased its adjusted EPS guidance to $7.20-$7.30 from the previous range of $7.10-$7.20. Management expects organic sales growth toward the high end of its 2.5-3% range, or 3.5-4% excluding SKU rationalization.
The company reaffirmed its free cash flow guidance of $200-$300 million and expects adjusted operating margin toward the high end of 22.2-22.7%.
Solventum also completed its major ERP cutovers and exited more than 90% of its transition service agreements with 3M. The planned HIS separation remains on track as management evaluates sale and spin-off alternatives to sharpen its MedTech focus.
Our Take
Solventum delivered a mixed third-quarter 2026, with earnings surpassing the Zacks Consensus Estimate while revenues fell short. Despite the reported sales decline, underlying demand remained healthy, supported by new product launches and stronger commercial execution. MedSurg benefited from negative pressure wound therapy and IV-site management products. Dental Solutions gained from innovation in core restoratives, while HIS maintained momentum in revenue cycle management solutions.
However, reported sales were impacted by the expected reversal of approximately $125 million in advance orders placed during the second quarter ahead of ERP cutovers. Management estimated normalized organic growth of approximately 4% compared with the reported 2.8% decline. Adjusted operating margin contracted 70 basis points year over year to 19.9%, reflecting the ERP-related timing headwind. Excluding this impact, management estimated an adjusted operating margin of approximately 22.3%. Inflation and tariffs continued to pressure profitability, although cost savings and portfolio optimization provided some relief.
Solventum continued to make progress on its transformation and portfolio strategy. The company completed its major ERP cutovers and exited more than 90% of its transition service agreements with 3M. The planned HIS separation remains on track and is expected to sharpen its focus on MedSurg and Dental Solutions. Acera remained a bright spot, supported by strong growth and the FDA clearance for the combined use of Restrata and V.A.C. Therapy.
SOLV’s Zacks Rank and Key Picks
Solventum currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the broader medical space are OPKO Health (OPK - Free Report) , Intuitive Surgical (ISRG - Free Report) and Globus Medical (GMED - Free Report) .
OPKO Health, currently flaunting a Zacks Rank #1 (Strong Buy), reported a second-quarter 2026 adjusted loss of 1 cent per share, which surpassed the Zacks Consensus Estimate by 87.5%. Revenues of $163.6 million beat the Zacks Consensus Estimate by 24.7%. You can see the complete list of today’s Zacks #1 Rank stocks here.
OPK has an estimated earnings growth rate of 23.3% for 2026. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 95.1%.
Intuitive Surgical, currently carrying a Zacks Rank #2 (Buy), reported third-quarter 2026 adjusted EPS of $3.00, which beat the Zacks Consensus Estimate by 13.6%. Revenues of $3.05 billion surpassed the Zacks Consensus Estimate by 4.9%.
Intuitive Surgical has a long-term estimated growth rate of 14.9%. ISRG’s earnings surpassed estimates in each of the trailing four quarters, the average surprise being 15.1%.
Globus Medical, currently carrying a Zacks Rank #2, reported a second-quarter 2026 adjusted EPS of $1.34, which surpassed the Zacks Consensus Estimate by 19.6%. Revenues of $789.6 million beat the Zacks Consensus Estimate by 0.4%.
GMED has an estimated long-term earnings growth rate of 12.4%. The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 27.9%.