Solventum (SOLV) official guidance

Our expectation for annual non-operating expenses of approximately $300 million and a tax rate in the range of 19.5%-20.5% are both unchanged.

Given our continued solid performance through the first half of the year and confidence in executing for the remainder of the year, along with the tariff refund, we are raising our earnings per share guide to $7.10-$7.20 versus our prior range of $6.40-$6.60.

We continue to estimate currency will have a favorable impact of approximately 100 basis points on sales growth for the full-year.

We now estimate free cash flow will be in a range of $200 million-$300 million versus our prior estimate of approximately $200 million, with the change reflecting the expected benefit of tariff refunds at the high end.

Our expectation for annual non-operating expenses of approximately $300 million and a tax rate in the range of 19.5%-20.5% are both unchanged.

Our outlook for operating margin is increasing to a range of 22.2%-22.7%, an increase versus our prior 21%-21.5%, which reflects the entire expected tariff refund benefit of approximately 120 basis points.

We are tightening our organic sales growth range to the upper half of our initial 2%-3% guidance range, raising our organic sales growth range to 2.5%-3%, excluding the expected 100 basis points impact of SKU exits this year.

This now represents 3.5%-4% growth.

We're expecting to launch almost 20 new products through the first quarter of 2028.

With those advanced orders reversing mostly in Q3, we're going to expect that Q3 to be in that -3% to -4% range.

To complete the squeeze math, that puts our Q4 in that same 3%-4% range, but on a positive side.

Tariffs are now expected to have a neutral impact versus our prior estimate of $100 million-$120 million, given the tariff refund we recognized in Q2.

With that in mind, I think Q2 looks like another strong quarter for us. We should see improved earnings per share. Certainly this phasing is gonna drop through an additional amount. We just don't know exactly what it'll be at this point.

You know, our estimate, we think is closer to 56% is probably a good estimate for the coming quarters for the rest of the year here. Strong Q1, little above 56%. We think the rest of the year is gonna come in closer, just under 56% would be a good estimate.

We do expect our operating expenses to step down from Q1 into Q2, three and four.

We estimate over $100 million of sales timing benefit in Q2 that we expect will reverse in 2026, mostly in Q3.

Other considerations for 2026 include capital expenditures of $400 million-$450 million, an effective tax rate between 19.5%-20.5%, and non-operating expenses of $300 million, primarily due to net interest expense of around $270 million.

It is a multi-year program, from starting this year, 2026 into 2029 and 2030. Just to highlight, you know, as you said, it's a $500 million cost takeout program.

We're moving with urgency towards our long-range plan goals of accelerating sales growth to 4%-5%, operating margins of 23%-25%, growing earnings per share at a 10% CAGR, and free cash flow conversion rate above 80%.

We're moving with urgency towards our long-range plan goals of accelerating sales growth to 4%-5%, operating margins of 23%-25%, growing earnings per share at a 10% CAGR, and free cash flow conversion rate above 80%.