Carrier Global Q2 Earnings & Revenues Beat Estimates, Stock Down

Carrier Global CARR reported second-quarter 2025 adjusted earnings of 92 cents per share, which beat the Zacks Consensus Estimate by 1.10% and surged 26% year over year.

Net sales of $6.11 billion beat the Zacks Consensus Estimate by 0.87% and increased 3% year over year. Product sales (89.6% of net sales) of $5.48 billion increased by 3.1% year over year. Service sales (10.4% of net sales) of $636 million were up 2.1% year over year.

CARR earnings beat the Zacks Consensus Estimate in all four trailing quarters, the surprise being 5.69%, on average.

CARR shares declined 7.94% in pre-market trading.

CARR’s Quarter in Details

Climate Solutions Americas (CSA) revenues of $3.25 billion contributed 53.2% to net sales and increased 13.5% year over year. Sales increased 14% organically. This increase was driven by exceptional performance in Commercial sales, which rose 45%, along with Residential sales growing 10%, which more than compensated for the marginal decline in Light Commercial sales.

Climate Solutions Europe (CSE) revenues of $1.25 billion contributed 20.5% to net sales and increased 4.9% year over year. Organic sales remained flat, with Commercial sales up by low single digits while Residential and Light Commercial remained flat.  

Carrier Global Corporation Price, Consensus and EPS Surprise

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

Climate Solutions Asia Pacific Middle East & Africa (CSAME) revenues of $882 million contributed 14.4% to net sales and declined 2.2% year over year. Sales decreased 4% organically, driven by declines in Residential Light Commercial in China, partially offset by strength in other countries.

Climate Solutions Transportation (CST) revenues of $726 million contributed 11.9% to net sales and decreased 25.4% year over year. Sales decreased 1% organically, as growth in Container and North America Truck and Trailer segments was offset by declines in Europe and Asia Truck and Trailer operations.

Research & development (R&D) expenses increased 0.6% year over year to $161 million. As a percentage of revenues, R&D expenses declined 10 basis points (bps) year over year.

Selling, general & administrative (SG&A) expenses increased 3% year over year to $813 million. As a percentage of revenues, SG&A expenses remained unchanged year over year.

Adjusted operating margin expanded 130 bps on a year-over-year basis to 19.1%.

Adjusted operating margin in the Climate Solutions Americas segment expanded 210 bps year over year to 27%. The Climate Solutions Europe segment increased 10 bps year over year to 7.9%. Climate Solutions Asia Pacific, Middle East & Africa segment contracted 210 bps year over year to 15.3%. Climate Solutions Transportation segment expanded 340 bps year over year to 17.6%.

CARR’s Balance Sheet

As of June 30, 2025, Carrier had cash and cash equivalents of $1.8 billion compared with $1.69 billion as of March 31, 2025.

Total debt (including the current portion) as of June 30, 2025, was $11.44 billion compared with $11.18 billion as of March 31, 2025.

The company generated $649 million in cash from operations compared with $483 million in the previous quarter.

Free cash flow was $568 million compared with $420 million reported in the prior quarter.

In the second quarter of 2025, CARR repurchased $328 million of its shares and paid $190 million in dividends.

Carrier Offers Positive 2025 Outlook

For 2025, Carrier expects to achieve sales of $23 billion, reflecting mid-single-digit organic growth.

Adjusted operating margin is expected to be between 16.5% and 17%, up 100 bps from 2024. 

The company anticipates adjusted earnings between $3 per share and $3.10, up mid to high-teens.

Free cash flow is expected to be between $2.4 billion and $2.6 billion.

Zacks Rank & Stocks to Consider

Carrier currently carries a Zacks Rank #3 (Hold).

Arista Networks ANET, MKS Inc. MKSI and CommScope COMM are some better-ranked stocks that investors can consider in the broader Zacks Computer & Technology sector. ANET, MKSI and COMM sport a Zacks Rank #1 (Strong Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

Arista Networks shares have appreciated 6.3% year to date. Arista Networks is set to report its second-quarter 2025 results on Aug. 5.

MKS Inc. shares are down 2% year to date. MKS Inc. is set to report its second-quarter 2025 results on Aug. 6.

CommScope shares have jumped 56.1% year to date. CommScope is set to report its second-quarter 2025 results on Aug. 7.

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This article originally published on Zacks Investment Research (zacks.com).

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