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Can Solventum Sustain Growth Amid Tariff Headwinds in Q2 Earnings?
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Key Takeaways
{\"0\":\"SOLV aims to build on Q1 momentum as it reports Q2 earnings amid operational and macro headwinds.\",\"1\":\"The MedSurg segment is likely to stay strong, while Dental, HIS, and Filtration show stable demand trends.\",\"2\":\"SOLV continues to advance its transformation plan, including ERP rollout and transition service exits.\"}
Solventum (SOLV - Free Report) is scheduled to release second-quarter 2025 results on Aug. 7, after market close. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 12.61%. SOLV delivered a trailing four-quarter average earnings surprise of 11.48%.
Solventum Q2 Estimates
Currently, the Zacks Consensus Estimate for revenues is pegged at $2.12 billion. The consensus mark for earnings is pinned at $1.45 per share.
Segmental Outlook: What to Expect Across Solventum’s Core Businesses
Solventum’s MedSurg segment delivered healthy 6% organic growth in the previous quarter, with strong contributions from Infection Prevention and Surgical Solutions, which rose 8.2%. Advanced Wound Care also performed well, supported by continued demand for products like the V.A.C Peel and Place dressing. Looking to the second quarter, MedSurg is likely to benefit from continued product adoption and improved commercial execution. However, some moderation in growth is expected as the company works through the impact of earlier order timing related to the ERP system and distribution center changes. Despite this, underlying demand trends and execution improvements suggest the segment should continue to perform solidly.
The Dental Solutions segment grew 0.4% organically last quarter, reflecting a softer market environment. Even so, Solventum saw steady demand in core restorative products and encouraging traction from recent launches such as Filtek Easy Match and the 3D-printed Clarity Precision Grip Attachments. For the upcoming quarter, the segment is likely to remain stable, supported by its presence in essential dental procedures and a growing portfolio of innovative offerings. While certain areas, like impression materials, may stay weak, new products and a more focused sales effort are expected to help offset these headwinds.
Health Information Systems (HIS) segment posted nearly 4% organic growth in the prior quarter, driven by strong customer retention in revenue cycle management software. There was also a modest lift from clinician productivity solutions, helped by easier comparisons. In the second quarter, HIS is likely to maintain steady growth as interest builds around Solventum’s AI-powered autonomous coding tools, which help healthcare organizations improve efficiency and navigate complex regulations. Continued investment in digital capabilities and client support is expected to keep the momentum going in this segment.
Purification and Filtration grew 2.2% organically in the last quarter, with strength in bioprocessing and industrial filtration partially offset by weaker membrane-related sales. This segment is expected to show consistent performance in the coming quarter, as demand for bioprocessing remains solid and Solventum benefits from earlier capacity expansions. While the business is being prepared for divestiture later this year, it continues to contribute positively. It is likely to remain a stable part of the portfolio in the near term.
Other Important Factors to Consider Before SOLV Reports
Investors are likely to ask questions related to updates on Solventum’s progress on its three-phase transformation plan as it nears the midpoint of its first full year as a public company. Management highlighted early momentum in commercial execution, strategic focus, and internal capability building. Key milestones include exiting more than 30% of transition service agreements and executing the largest ERP deployment to date—both critical steps toward full operational independence. While some short-term disruption is expected, the second-quarter results may reveal whether these changes are translating into long-term efficiency gains.
Another important focus for the investors will be the company’s steps to manage tariff-related headwinds, with an $80 to $100 million impact expected in the second half due to fast inventory turnover. Though not affecting revenue, these tariffs are set to pressure margins. SOLV may also provide an update on the planned year-end divestiture of the Purification and Filtration business, which may also provide clarity on capital deployment priorities and the path toward future tuck-in acquisitions.
The company also updated its 2025 outlook on its first-quarter earnings call, raising its full-year organic revenue growth guidance to a range of 1.5% to 2.5%, up from the prior view, reflecting stronger volume trends and improved commercial execution. Adjusted earnings per share are expected to remain between $5.45 and $5.65, unchanged despite anticipated tariff headwinds in the second half of the year. Solventum also reaffirmed its full-year free cash flow guidance in the range of $450 million to $550 million, supported by solid early-year performance and ongoing efforts to offset margin pressures through operational and strategic initiatives.
Our proven model does not conclusively predict an earnings beat for Solventum this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% for Solventum. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Solventum currently has a Zacks Rank #4 (Sell).
Stocks Worth a Look
Cardinal Health, Inc. (CAH - Free Report) , CorMedix Inc. (CRMD - Free Report) and McKesson Corporation (MCK - Free Report) are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
Image: Shutterstock
Can Solventum Sustain Growth Amid Tariff Headwinds in Q2 Earnings?
Key Takeaways
Solventum (SOLV - Free Report) is scheduled to release second-quarter 2025 results on Aug. 7, after market close. In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 12.61%. SOLV delivered a trailing four-quarter average earnings surprise of 11.48%.
Solventum Q2 Estimates
Currently, the Zacks Consensus Estimate for revenues is pegged at $2.12 billion. The consensus mark for earnings is pinned at $1.45 per share.
Segmental Outlook: What to Expect Across Solventum’s Core Businesses
Solventum’s MedSurg segment delivered healthy 6% organic growth in the previous quarter, with strong contributions from Infection Prevention and Surgical Solutions, which rose 8.2%. Advanced Wound Care also performed well, supported by continued demand for products like the V.A.C Peel and Place dressing. Looking to the second quarter, MedSurg is likely to benefit from continued product adoption and improved commercial execution. However, some moderation in growth is expected as the company works through the impact of earlier order timing related to the ERP system and distribution center changes. Despite this, underlying demand trends and execution improvements suggest the segment should continue to perform solidly.
The Dental Solutions segment grew 0.4% organically last quarter, reflecting a softer market environment. Even so, Solventum saw steady demand in core restorative products and encouraging traction from recent launches such as Filtek Easy Match and the 3D-printed Clarity Precision Grip Attachments. For the upcoming quarter, the segment is likely to remain stable, supported by its presence in essential dental procedures and a growing portfolio of innovative offerings. While certain areas, like impression materials, may stay weak, new products and a more focused sales effort are expected to help offset these headwinds.
Health Information Systems (HIS) segment posted nearly 4% organic growth in the prior quarter, driven by strong customer retention in revenue cycle management software. There was also a modest lift from clinician productivity solutions, helped by easier comparisons. In the second quarter, HIS is likely to maintain steady growth as interest builds around Solventum’s AI-powered autonomous coding tools, which help healthcare organizations improve efficiency and navigate complex regulations. Continued investment in digital capabilities and client support is expected to keep the momentum going in this segment.
Purification and Filtration grew 2.2% organically in the last quarter, with strength in bioprocessing and industrial filtration partially offset by weaker membrane-related sales. This segment is expected to show consistent performance in the coming quarter, as demand for bioprocessing remains solid and Solventum benefits from earlier capacity expansions. While the business is being prepared for divestiture later this year, it continues to contribute positively. It is likely to remain a stable part of the portfolio in the near term.
Other Important Factors to Consider Before SOLV Reports
Investors are likely to ask questions related to updates on Solventum’s progress on its three-phase transformation plan as it nears the midpoint of its first full year as a public company. Management highlighted early momentum in commercial execution, strategic focus, and internal capability building. Key milestones include exiting more than 30% of transition service agreements and executing the largest ERP deployment to date—both critical steps toward full operational independence. While some short-term disruption is expected, the second-quarter results may reveal whether these changes are translating into long-term efficiency gains.
Another important focus for the investors will be the company’s steps to manage tariff-related headwinds, with an $80 to $100 million impact expected in the second half due to fast inventory turnover. Though not affecting revenue, these tariffs are set to pressure margins. SOLV may also provide an update on the planned year-end divestiture of the Purification and Filtration business, which may also provide clarity on capital deployment priorities and the path toward future tuck-in acquisitions.
The company also updated its 2025 outlook on its first-quarter earnings call, raising its full-year organic revenue growth guidance to a range of 1.5% to 2.5%, up from the prior view, reflecting stronger volume trends and improved commercial execution. Adjusted earnings per share are expected to remain between $5.45 and $5.65, unchanged despite anticipated tariff headwinds in the second half of the year. Solventum also reaffirmed its full-year free cash flow guidance in the range of $450 million to $550 million, supported by solid early-year performance and ongoing efforts to offset margin pressures through operational and strategic initiatives.
Solventum Corporation Price and EPS Surprise
Solventum Corporation price-eps-surprise | Solventum Corporation Quote
What the Zacks Model Unveils
Our proven model does not conclusively predict an earnings beat for Solventum this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. This is not the case here, as you will see below.
Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, is 0.00% for Solventum. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
Zacks Rank: Solventum currently has a Zacks Rank #4 (Sell).
Stocks Worth a Look
Cardinal Health, Inc. (CAH - Free Report) , CorMedix Inc. (CRMD - Free Report) and McKesson Corporation (MCK - Free Report) are a few medical stocks worth considering, as these have the right combination of elements to beat on earnings this reporting cycle.
Cardinal Health has an Earnings ESP of +0.72% and a Zacks Rank of 2. CAH has an estimated long-term growth rate of 10.9%. You can see the complete list of today’s Zacks #1 Rank stocks here.
Cardinal Health’s earnings surpassed estimates in each of the trailing four quarters, with the average surprise being 10.3%.
CorMedix has an Earnings ESP of +27.12% and is a Zacks Rank #1 stock. CRMD has an estimated growth rate of 70.1% for 2026.
CorMedix’s earnings surpassed estimates in all the trailing four quarters, with the average surprise being 25.8%.
McKesson has an Earnings ESP of +0.14% and a Zacks Rank of 2. MCK has an estimated long-term growth rate of 13.3%.
McKesson’s earnings surpassed estimates in three of the trailing four quarters and missed once, with the average surprise being 3.9%.