3M spinout Solventum has estimated that tariffs will wipe $80 million to $100 million from its earnings this year.
The company made the prediction during a first-quarter earnings call on Thursday. Solventum is assuming China has a 125% tariff on U.S. imports. The tariff on goods flowing from the U.S. to China accounts for half of the forecast impact. Solventum is also assuming that the 10% tariff on goods traded between the U.S. and Europe stays in place and does not rise. That tariff represents one-third of the forecast impact.
CFO Wayde McMillan said on an earnings call that “minimal imports from China to the U.S.” and trade between the U.S. and Mexico and Canada makes up the rest of the anticipated impact. The company has received exemptions under the United States-Mexico-Canada Agreement to mitigate the impact of tariffs on trade within North America.
The exemptions are one of several mitigating actions Solventum has taken. McMillan said the company is continuing to optimize inventory and its teams are “heavily focused on sourcing options all across our supply chain.” Solventum is also looking at “thoughtful pricing strategies where we think that makes sense for the long-term business,” the CFO said.
CEO Bryan Hanson added on the call that tariffs have given “a higher sense of urgency” to the company’s existing efforts to regionalize its supply chains. The potential to reduce the impact of tariffs by rethinking supply and pricing, as well as by working with trade associations to secure exemptions, led Hanson to discourage analysts from extrapolating the 2026 impact from this year’s figures.
Even so, Stifel analysts lowered their forecasts for 2026 to reflect tariffs. The analysts said in a note to investors that, although Solventum offered no formal guidance for 2026, “it feels like a sensible approach to contemplate at least some impact given the uncertain tariff environment.”
Hanson said the anticipated impact of tariffs this year prevented Solventum from raising its earnings per share guidance. Solventum raised its full-year organic revenue guidance but kept its EPS forecast of $5.45 to $5.65.
The company expects tariffs to hurt EPS by a range of 35 cents to 45 cents.
