Carrier Global Corp’s Earnings Call Highlights Growth and Challenges

Carrier Global Corp. ((CARR)) has held its Q1 earnings call. Read on for the main highlights of the call.

Carrier Global Corp’s recent earnings call reflected a generally positive sentiment, highlighting a strong start to the year with significant growth in several segments and robust EPS growth. The company celebrated a successful partnership with Google, although challenges persist in the light commercial segment and in Asia, alongside ongoing tariff concerns. Despite these hurdles, strategic initiatives and a positive financial outlook slightly outweighed the challenges.

Strong Start to the Year

Carrier Global Corp reported a promising beginning to the year, with orders up by high single digits. Notably, there was double-digit orders growth in Climate Solutions, Europe, and Transportation. The company’s total backlog increased by about 10% year-over-year and 15% sequentially, indicating strong demand across various segments.

Financial Performance

The company demonstrated impressive financial performance, achieving a 27% growth in adjusted EPS on 2% organic growth. Carrier generated $420 million in free cash flow and returned $1.5 billion to shareholders through dividends and share repurchases, showcasing its commitment to delivering value to its investors.

Segment Performance

Carrier’s commercial segment, excluding NORESCO, and residential strength in the Americas were notable, with organic sales up around 20%. The data center segment is expected to double to $1 billion this year, driven by strong performance in the first quarter.

Partnership and Innovation

A new partnership with Google was announced to enhance grid resilience and smarter energy management. Additionally, Carrier introduced its first air-cooled commercial heat pump in Europe, marking a significant step in innovation and sustainability.

Guidance Increase

Carrier increased its full-year adjusted EPS guidance to $3 to $3.10, representing a 20% year-over-year increase. This optimistic outlook is backed by strong financial performance and strategic initiatives, including effective pricing strategies to mitigate tariff challenges.

Challenges in Light Commercial Segment

The light commercial segment faced difficulties, with sales down around 35% due to a tough comparison with the previous year. Consequently, guidance for the full year decreased to down low double digits, highlighting an area of concern for the company.

Weakness in Asia

The Asia, Middle East, and Africa segment experienced a 6% decline in organic sales, driven by continued weakness in residential China and parts of Southeast Asia, presenting a challenge for Carrier in these regions.

Tariff Challenges

Carrier is addressing a $300 million tariff exposure through strategic pricing actions, demonstrating its ability to navigate complex global trade environments.

Legacy Business Performance

Carrier’s legacy residential and light commercial business in Europe is operating at low single-digit operating margins, indicating room for improvement in these traditional segments.

Forward-Looking Guidance

Carrier Global Corp provided an optimistic outlook for the future, supported by strong financial performance and strategic initiatives. The company anticipates a mid-single-digit organic sales growth and has increased its adjusted EPS guidance for the full year 2025 to $3 to $3.10, reflecting a 20% year-over-year growth.

In conclusion, Carrier Global Corp’s earnings call painted a picture of a company on a strong growth trajectory, despite facing some challenges. The positive sentiment was driven by significant growth in key segments, strategic partnerships, and an optimistic financial outlook, making it an attractive prospect for investors.