Carrier Global (CARR - Free Report) reported third-quarter 2023 adjusted earnings of 89 cents per share, which surpassed the Zacks Consensus Estimate by 14.1%. The figure increased 27.1% year over year.
Net sales of $5.73 billion missed the Zacks Consensus Estimate by 2.03%. The figure increased 5.1% year over year, driven by 7.3% growth in HVAC sales.
Product sales (88.7% of net sales) of $5.08 billion increased 3.9% year over year. Service sales (11.3% of net sales) of $650 million were up 16.1% year over year.
Carrier shares were up 6.71% in after-hours trading. The company’s shares have underperformed the Zacks Computer & Technology sector year to date. While CARR shares have gained 14%, the Computer & Technology sector has increased 30%.
Quarter Details
HVAC revenues of $4 billion accounted for 69.9% of net sales. The figure beat the Zacks Consensus Estimate of $3.95 billion. Our model estimate was pegged at $3.96 billion.
Refrigeration revenues of $924 million were up 0.1% year over year and accounted for 16.1% of net sales. The figure missed the consensus mark of 993 million. Our model estimate was pegged at $954.6 million.
Fire & Security revenues of $923 million were up 2% year over year and contributed 16.1% of net sales. The reported figure came ahead of the Zacks Consensus Estimate of $918 million. Our model estimate was pegged at $922.9 million.
Research & development (R&D) expenses increased 9.8% year over year to $157 million. As a percentage of revenues, R&D expenses declined 140 basis points (bps) year over year.
Selling, general & administrative (SG&A) expenses grew 33.2% year over year to $831 million. As a percentage of revenues, SG&A expenses increased 310 bps year over year.
Adjusted operating margin expanded 240 bps on a year-over-year basis to 18.2%.
Adjusted operating margin of the HVAC segment expanded 410 bps year over year to 20.8%.
The Refrigeration segment reported an adjusted operating margin of 12%, which contracted 80 bps year over year.
Fire & Security’s adjusted operating margin was 18.3%, which expanded 170 bps year over year.
Balance Sheet
As of Sep 30, 2023, Carrier had cash and cash equivalents of $3.9 billion compared with $3.21 billion as of Jun 30, 2023.
Total debt (including the current portion) as of Sep 30, 2023, was $8.79 billion compared with $8.8 billion as of Jun 30, 2023.
In the reported quarter, Carrier generated $1.04 million in cash from operations, up from $384 million in the prior quarter.
Capital expenditure was $92 million in the second quarter of 2023. Free cash flow was $949 million for the reported quarter.
2023 Guidance
For 2023, Carrier expects sales of more than $22 billion. The Zacks Consensus Estimate for sales is pegged at $22.15 billion.
Adjusted operating margin is expected to be roughly 14.5%.
CARR anticipates adjusted earnings of roughly $2.70 per share. The Zacks Consensus Estimate for the same is pegged at $2.57 per share.
The company expects a free cash flow of more than $1.9 billion.
Zacks Rank & Stocks to Consider
Currently, Carrier has a Zacks Rank #3 (Hold).
eGain (EGAN - Free Report) , GoDaddy (GDDY - Free Report) and Itron (ITRI - Free Report) are some better-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
eGain shares have declined 34.3% year to date. EGAN is set to report its first-quarter fiscal 2024 results on Nov 2.
GoDaddy shares have declined 2.6% year to date. GDDY is set to report its third-quarter 2023 results on Nov 2.
Itron shares have returned 13.9% year to date. ITRI is set to report its third-quarter 2023 results on Nov 2.
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Carrier Global (CARR - Free Report) reported third-quarter 2023 adjusted earnings of 89 cents per share, which surpassed the Zacks Consensus Estimate by 14.1%. The figure increased 27.1% year over year.
Net sales of $5.73 billion missed the Zacks Consensus Estimate by 2.03%. The figure increased 5.1% year over year, driven by 7.3% growth in HVAC sales.
Product sales (88.7% of net sales) of $5.08 billion increased 3.9% year over year. Service sales (11.3% of net sales) of $650 million were up 16.1% year over year.
Carrier shares were up 6.71% in after-hours trading. The company’s shares have underperformed the Zacks Computer & Technology sector year to date. While CARR shares have gained 14%, the Computer & Technology sector has increased 30%.
Quarter Details
HVAC revenues of $4 billion accounted for 69.9% of net sales. The figure beat the Zacks Consensus Estimate of $3.95 billion. Our model estimate was pegged at $3.96 billion.
Refrigeration revenues of $924 million were up 0.1% year over year and accounted for 16.1% of net sales. The figure missed the consensus mark of 993 million. Our model estimate was pegged at $954.6 million.
Fire & Security revenues of $923 million were up 2% year over year and contributed 16.1% of net sales. The reported figure came ahead of the Zacks Consensus Estimate of $918 million. Our model estimate was pegged at $922.9 million.
Research & development (R&D) expenses increased 9.8% year over year to $157 million. As a percentage of revenues, R&D expenses declined 140 basis points (bps) year over year.
Selling, general & administrative (SG&A) expenses grew 33.2% year over year to $831 million. As a percentage of revenues, SG&A expenses increased 310 bps year over year.
Adjusted operating margin expanded 240 bps on a year-over-year basis to 18.2%.
Adjusted operating margin of the HVAC segment expanded 410 bps year over year to 20.8%.
The Refrigeration segment reported an adjusted operating margin of 12%, which contracted 80 bps year over year.
Fire & Security’s adjusted operating margin was 18.3%, which expanded 170 bps year over year.
Balance Sheet
As of Sep 30, 2023, Carrier had cash and cash equivalents of $3.9 billion compared with $3.21 billion as of Jun 30, 2023.
Total debt (including the current portion) as of Sep 30, 2023, was $8.79 billion compared with $8.8 billion as of Jun 30, 2023.
In the reported quarter, Carrier generated $1.04 million in cash from operations, up from $384 million in the prior quarter.
Capital expenditure was $92 million in the second quarter of 2023. Free cash flow was $949 million for the reported quarter.
2023 Guidance
For 2023, Carrier expects sales of more than $22 billion. The Zacks Consensus Estimate for sales is pegged at $22.15 billion.
Adjusted operating margin is expected to be roughly 14.5%.
CARR anticipates adjusted earnings of roughly $2.70 per share. The Zacks Consensus Estimate for the same is pegged at $2.57 per share.
The company expects a free cash flow of more than $1.9 billion.
Zacks Rank & Stocks to Consider
Currently, Carrier has a Zacks Rank #3 (Hold).
eGain (EGAN - Free Report) , GoDaddy (GDDY - Free Report) and Itron (ITRI - Free Report) are some better-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
eGain shares have declined 34.3% year to date. EGAN is set to report its first-quarter fiscal 2024 results on Nov 2.
GoDaddy shares have declined 2.6% year to date. GDDY is set to report its third-quarter 2023 results on Nov 2.
Itron shares have returned 13.9% year to date. ITRI is set to report its third-quarter 2023 results on Nov 2.
Infrastructure Stock Boom to Sweep America
A massive push to rebuild the crumbling U.S. infrastructure will soon be underway. It’s bipartisan, urgent, and inevitable. Trillions will be spent. Fortunes will be made.
The only question is “Will you get into the right stocks early when their growth potential is greatest?”
Zacks has released a Special Report to help you do just that, and today it’s free. Discover 5 special companies that look to gain the most from construction and repair to roads, bridges, and buildings, plus cargo hauling and energy transformation on an almost unimaginable scale.
Download FREE: How To Profit From Trillions On Spending For Infrastructure >>
Get the latest research report on ITRI - FREE
Get the latest research report on EGAN - FREE
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