Minnesota health products company Solventum is raising its sales guidance due to strong first quarter financial results as it prepares to take on tariffs that executives estimate will cost $80 million to $100 million this year.
The company’s inventory turns over quickly in a 90-day period, said Chief Financial Officer Wayde McMillan. Executives plan to optimize inventory, refine pricing strategies and work with trade associations to advocate for tariff exemptions to blunt the effect.
In a call with investors Thursday afternoon, CEO Bryan Hanson called the first quarter “one of the more eventful starts to a new year.”
“While we are managing this turbulent environment aggressively,” Hanson said, “we are also ensuring that our primary focus remains very clear. No. 1, and obviously, delivering for our customers worldwide so patients continue to receive the care they need. And No. 2, and very importantly, staying committed to investing in the key areas that will support continued and sustainable improvement in our growth.”
Solventum spun out of 3M in 2024, and will move its headquarters from Maplewood to Eagan in the coming years. It makes health care products like dental materials and wound care supplies as well as hospital software.
Overall, Solventum reported adjusted net profits of $234 million on about $2.1 billion in sales for the quarter that ended March 31. Adjusted profits fell by roughly $125 million compared to the same period a year ago, while sales rose on an organic basis by 4.3%.
The company’s profit and sales both beat Wall Street estimates.
The 3M health care spinoff now expects 2025 organic sales growth of 1.5% to 2.5%, up from a range of 1% to 2%. Its profit estimates for the year remain the same.