Carrier Global CARR reported third-quarter 2024 adjusted earnings of 77 cents per share, which missed the Zacks Consensus Estimate by 4.94%. The figure increased 3% year over year.

Net sales of $5.98 billion missed the Zacks Consensus Estimate by 9.50% but increased 21.3% year over year.  

The year-over-year surge was driven by the acquisition of Viessmann Climate Solutions, which contributed approximately 17% to overall sales growth. This acquisition helped enhance Carrier’s product offerings and market reach. 

Product sales (88.7% of net sales) of $5.3 billion increased 22.2% year over year. Service sales (11.3% of net sales) of $677 million were up 14.6% year over year.

Carrier Global Corporation Price, Consensus and EPS Surprise

Carrier Global Corporation price-consensus-eps-surprise-chart | Carrier Global Corporation Quote

CARR’s shares have soared 39.1% compared with the Zacks Computer and Technology sector’s rise of 25.3% year to date. The outperformance can be attributed to CARR’s strength in the HVAC Segment.

However, CARR is realigning its business and has adjusted its full-year guidance due to the move of the Fire & Security segment to discontinued operations. 

As a result, its revenue fell short of estimates, and the company has also lowered its guidance for 2024. These factors may put downward pressure on Carrier’s shares.

CARR’s Quarter in Details

HVAC revenues of $5.05 billion contributed 84.5% to net sales and increased 26.2% year over year.

Refrigeration revenues of $938 million were up 1.5% year over year and contributed 15.7% to net sales. 

Research & development (R&D) expenses increased 36.5% year over year to $172 million. As a percentage of revenues, R&D expenses expanded 30 basis points (bps) year over year.

Selling, general & administrative (SG&A) expenses rose 20.3% year over year to $799 million. As a percentage of revenues, SG&A expenses decreased 100 bps year over year.

Adjusted operating margin contracted 40 bps on a year-over-year basis to 17.4%.

Adjusted operating margin in the HVAC segment contracted 100 bps year over year to 19.8%.

The Refrigeration segment reported an adjusted operating margin of 12.5%, which expanded 50 bps year over year.

CARR’s Balance Sheet

As of Sept. 30, 2024, Carrier had cash and cash equivalents of $2.22 billion compared with $2.91 billion as of June 30.

Total debt (including the current portion) as of Sept. 30, 2024, was $12.43 billion compared with $13.32 billion as of June 30.

In the reported quarter, Carrier generated $431 million in cash from operations, down from $700 million in the prior quarter.

Capital expenditure was $312 million in the third quarter of 2024. Free cash flow was $119 million in the reported quarter.