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Carrier's (CARR) Q2 Earnings & Revenues Top Estimates, Up Y/Y
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Carrier Global (CARR - Free Report) delivered second-quarter 2023 adjusted earnings of 79 cents per share, which surpassed the Zacks Consensus Estimate by 3.9%. The figure increased by 14.5% year over year.
Net sales of $5.99 billion came ahead of the Zacks Consensus Estimate of $5.77 billion. The figure increased by 15% year over year.
Strong momentum across the HVAC and Fire & Security segments drove top-line growth.
However, softness in the Refrigeration segment was a concern.
Product sales (89.4% of net sales) of $5.35 billion increased 14.9% year over year. Service sales (10.6% of net sales) of $637 million were up 16% year over year.
Carrier Global Corporation Price, Consensus and EPS Surprise
HVAC revenues (70.4% of net sales) increased 24.4% year-over-year to $4.22 billion. The figure beat the Zacks Consensus Estimate of $3.95 billion. Well-performing light commercial and commercial HVAC businesses contributed well.
Refrigeration revenues of $972 million (16.2% of net sales) were down 6.6% from the year-ago quarter’s level. The figure missed the consensus mark of 993 million. The slowdown in container sales was a major concern. Softness in commercial refrigeration was a negative.
Fire & Security revenues (15.6% of net sales) of $932 million were up 5.1% year over year. The reported figure came ahead of the Zacks Consensus Estimate of $918 million.
Operating Results
Research & development (R&D) expenses increased 23.8% year over year to $151 million. Selling, general & administrative (SG&A) expenses grew 27.7% from the year-ago quarter’s level to $784 million.
As a percentage of revenues, R&D expenses expanded 20 basis points (bps) from the prior-year quarter’s level, while SG&A expenses expanded 130 bps year over year.
Adjusted operating margin contracted 40 bps on a year-over-year basis to 16.1%.
Adjusted operating margin of the HVAC segment expanded 70 bps year over year to 18.8%.
The Refrigeration segment reported an adjusted operating margin of 12.2%, contracting 240 bps.
Adjusted operating margin of Fire & Security was 14.7%, contracting by 50 bps year over year.
Balance Sheet
As of Jun 30, 2023, Carrier had cash and cash equivalents of $3.21 billion compared with $3.35 billion on Mar 31, 2023.
Total debt (including the current portion) at the end of the reported quarter was $8.8 billion compared with $8.9 billion at the end of the previous quarter.
In the reported quarter, Carrier generated $384 million in cash from operations, up from $120 million in the prior quarter.
Capital expenditure was $74 million in the first quarter of 2023. Free cash flow was $310 million for the reported quarter.
2023 Guidance
For 2023, Carrier expects sales of $22 billion. The Zacks Consensus Estimate for sales is pegged at $22.15 billion.
CARR anticipates adjusted earnings per share within $2.55-$2.65. The Zacks Consensus Estimate for the same is pegged at $2.57 per share.
The company expects a free cash flow of $1.9 billion.
Zacks Rank & Stocks to Consider
Currently, Carrier has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Salesforce (CRM - Free Report) , Akamai Technologies (AKAM - Free Report) and AvidXchange (AVDX - Free Report) . Salesforce sports a Zacks Rank #1 (Strong Buy), while Akamai Technologies and AvidXchange each carry a Zacks Rank #2 (Buy).
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Carrier's (CARR) Q2 Earnings & Revenues Top Estimates, Up Y/Y
Carrier Global (CARR - Free Report) delivered second-quarter 2023 adjusted earnings of 79 cents per share, which surpassed the Zacks Consensus Estimate by 3.9%. The figure increased by 14.5% year over year.
Net sales of $5.99 billion came ahead of the Zacks Consensus Estimate of $5.77 billion. The figure increased by 15% year over year.
Strong momentum across the HVAC and Fire & Security segments drove top-line growth.
However, softness in the Refrigeration segment was a concern.
Product sales (89.4% of net sales) of $5.35 billion increased 14.9% year over year. Service sales (10.6% of net sales) of $637 million were up 16% year over year.
Carrier Global Corporation Price, Consensus and EPS Surprise
Carrier Global Corporation price-consensus-eps-surprise-chart | Carrier Global Corporation Quote
Segment Details
HVAC revenues (70.4% of net sales) increased 24.4% year-over-year to $4.22 billion. The figure beat the Zacks Consensus Estimate of $3.95 billion. Well-performing light commercial and commercial HVAC businesses contributed well.
Refrigeration revenues of $972 million (16.2% of net sales) were down 6.6% from the year-ago quarter’s level. The figure missed the consensus mark of 993 million. The slowdown in container sales was a major concern. Softness in commercial refrigeration was a negative.
Fire & Security revenues (15.6% of net sales) of $932 million were up 5.1% year over year. The reported figure came ahead of the Zacks Consensus Estimate of $918 million.
Operating Results
Research & development (R&D) expenses increased 23.8% year over year to $151 million. Selling, general & administrative (SG&A) expenses grew 27.7% from the year-ago quarter’s level to $784 million.
As a percentage of revenues, R&D expenses expanded 20 basis points (bps) from the prior-year quarter’s level, while SG&A expenses expanded 130 bps year over year.
Adjusted operating margin contracted 40 bps on a year-over-year basis to 16.1%.
Adjusted operating margin of the HVAC segment expanded 70 bps year over year to 18.8%.
The Refrigeration segment reported an adjusted operating margin of 12.2%, contracting 240 bps.
Adjusted operating margin of Fire & Security was 14.7%, contracting by 50 bps year over year.
Balance Sheet
As of Jun 30, 2023, Carrier had cash and cash equivalents of $3.21 billion compared with $3.35 billion on Mar 31, 2023.
Total debt (including the current portion) at the end of the reported quarter was $8.8 billion compared with $8.9 billion at the end of the previous quarter.
In the reported quarter, Carrier generated $384 million in cash from operations, up from $120 million in the prior quarter.
Capital expenditure was $74 million in the first quarter of 2023. Free cash flow was $310 million for the reported quarter.
2023 Guidance
For 2023, Carrier expects sales of $22 billion. The Zacks Consensus Estimate for sales is pegged at $22.15 billion.
CARR anticipates adjusted earnings per share within $2.55-$2.65. The Zacks Consensus Estimate for the same is pegged at $2.57 per share.
The company expects a free cash flow of $1.9 billion.
Zacks Rank & Stocks to Consider
Currently, Carrier has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader technology sector are Salesforce (CRM - Free Report) , Akamai Technologies (AKAM - Free Report) and AvidXchange (AVDX - Free Report) . Salesforce sports a Zacks Rank #1 (Strong Buy), while Akamai Technologies and AvidXchange each carry a Zacks Rank #2 (Buy).
You can see the complete list of today’s Zacks #1 Rank stocks here.
Salesforce shares have gained 70.7% in the year-to-date period. The long-term earnings growth rate for CRM is currently projected at 19.25%.
Akamai shares have gained 9.5% in the year-to-date period. The long-term earnings growth rate for AKAM is currently projected at 10%.
AvidXchange shares have increased 21.1% in the year-to-date period. The long-term earnings growth rate for AVDX is currently projected at 22.90%.