Solventum's second-quarter profit falls 70% on higher expenses

Solventum

09/08/2024 24:01

Aug 8 (Reuters) - 3M spin-off Solventum's  SOLV.N 
second-quarter profit fell more than 70% on Thursday, hurt by
limited sales growth of its wound care and surgical
sterilization products and higher expenses, as it navigates
functioning as a newly independent company.
    These were Solventum's first financial results as an
independent company. Its first-quarter results were prepared on
a "carve-out" basis from 3M's healthcare business.
    In its first-quarter earnings, the company had warned that
it expected stand-up functional expenses to increase for the
rest of the year.
    Total operating expenses rose about 11%, to $1.84 billion,
for the second quarter.
    Minnesota-based Solventum is one of the largest providers of
sterilization devices, wound dressings, medical tape and other
hospital consumables used by healthcare facilities.
    Its net income fell over 70% in the reported quarter to $89
million, or 51 cents per share, from $321 million, or $1.86 per
share, a year earlier.
    Total net sales were $2.08 billion, almost flat compared to
last year.
    More than half of total sales in the second quarter came
from Solventum's MedSurg business, which provides wound
dressings and surgical equipment.
    The medical equipment maker raised the per-share range of
its current-year adjusted profit forecast to between $6.30 and
$6.50, from its earlier range of $6.10 per share to $6.40 per
share.
     "We are starting from a solid foundation and remain focused
on addressing historical underperformance and spin-related
topics to unlock significant value creation over time," CEO
Bryan Hanson said.
    The company now expects full-year organic sales to be flat
to up 1%. Its earlier organic sales forecast was flat to down
2%.
    On an adjusted basis, Solventum earned $1.56 per share for
the quarter ended June 30.

 (Reporting by Vaibhav Sadhamta; Editing by Pooja Desai)
 ((Vaibhav.Sadhamta@thomsonreuters.com;))