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Carrier Global Q1 Earnings Beat Estimates, Revenue Up Year over Year
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Key Takeaways
Carrier Global beat Q1 estimates with revenue up 2.4% year over year.
CARR saw HVAC strength, with data center orders up more than 500%.
Carrier Global's margins fell due to weak Residential and China demand.
Carrier Global (CARR - Free Report) shares closed at $67.17 on May 1 since the company reported its first-quarter 2026 results on April 30.
The company delivered adjusted earnings of 57 cents per share in the first quarter of 2026, down 12.3% from the year-ago period but surpassed the Zacks Consensus Estimate by 12.94%.
Revenues of $5.34 billion increased 2.4% year over year and topped the consensus mark by 6.07%. Product sales (87.4% of net sales) of $4.66 billion increased 0.3% year over year. Service sales (12.6% of net sales) of $674 million rose 19.1% year over year. While total company revenue expanded year over year, organic sales declined 1%, and foreign currency provided a 3% tailwind.
Momentum in Commercial HVAC helped set the tone, with data center demand standing out and management noting that backlog fully covers expected 2026 data center sales. On the orders front, Carrier saw strong momentum. Total company orders increased 11%, with Commercial HVAC orders up 35% and data center orders surging more than 500%.
Carrier Global Corporation Price, Consensus and EPS Surprise
Climate Solutions Americas remained the largest contributor, with revenues of $2.50 billion, down 3% year over year and 3% organic decline. Residential revenue was down about 12%, partially offset by strength in Light Commercial (up 9%) and Commercial (up 1% organically).
Climate Solutions Europe posted revenues of $1.29 billion, up 11% year over year, with organic sales flat. Management cited continued electrification trends and heat pump strength across Europe, though Commercial was down mid-single digits.
Climate Solutions Asia Pacific, Middle East & Africa revenue rose 1% year over year to $834 million, while organic sales fell 1% as China Residential and Light Commercial remained a headwind.
Climate Solutions Transportation revenue increased 10% year over year to $713 million. Organic sales increased 5% year over year with 38% growth in Container, partially offset by a decline in Global Truck and Trailer, down high single digits.
Carrier's Operating Details
Research & development (R&D) expenses decreased 6.5% year over year to $143 million. As a percentage of revenues, R&D expenses declined 30 basis points (bps) year over year. Selling, general & administrative (SG&A) expenses increased 18.1% year over year to $861 million. As a percentage of revenues, SG&A expenses expanded 210 bps year over year.
Adjusted operating margin contracted 510 bps on a year-over-year basis to 11.1%. Management tied the year-over-year pressure primarily to lower volume and under-absorption in the Americas Residential business and continued weakness in China Residential and Light Commercial.
At the segment level, Climate Solutions Americas' margin decreased to 14.9% from 22.2%, reflecting lower Residential sales and associated factory under-absorption. Climate Solutions Europe's margin declined to 6.9% from 9.0%, driven by lower Commercial volume and higher promotions, partially offset by productivity. Climate Solutions Asia Pacific, Middle East & Africa margin fell to 9.7% from 14.6% as China RLC weakness weighed, while the Transportation margin edged down to 14.2% from 14.9% due to an unfavorable mix.
CARR’s Balance Sheet
Carrier ended March 31, 2026, with cash and cash equivalents of $1.37 billion compared with $1.55 billion as of Dec. 31, 2025.
Total short-term borrowings plus current portion of long-term debt rose to $1.74 billion, while long-term debt stood at $10.42 billion.
Net cash provided by operating activities was $79 million, and free cash flow was an outflow of $15 million.
In the first quarter of 2025, CARR returned approximately $500 million to shareholders through dividends and repurchases.
Carrier Reaffirms 2026 Targets
Carrier reaffirmed its full-year 2026 guidance, calling for approximately $22 billion in sales, with organic growth flat to up low single digits.
The company continues to expect adjusted operating profit of roughly $3.4 billion, adjusted earnings of about $2.80 per share and free cash flow of around $2 billion.
Shares of Janus International Group have plunged 22.4% in the year-to-date period. Janus International Group is set to report the first quarter 2026 results on May 12.
Shares of Johnson Controls International have gained 21.4% in the year-to-date period. Johnson Controls International is slated to report second-quarter fiscal 2026 results on May 6.
Toll Brothers shares have gained 28.7% in the year-to-date period. Toll Brothers is set to report second-quarter fiscal 2026 results on May 20.
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Carrier Global Q1 Earnings Beat Estimates, Revenue Up Year over Year
Key Takeaways
Carrier Global (CARR - Free Report) shares closed at $67.17 on May 1 since the company reported its first-quarter 2026 results on April 30.
The company delivered adjusted earnings of 57 cents per share in the first quarter of 2026, down 12.3% from the year-ago period but surpassed the Zacks Consensus Estimate by 12.94%.
Revenues of $5.34 billion increased 2.4% year over year and topped the consensus mark by 6.07%. Product sales (87.4% of net sales) of $4.66 billion increased 0.3% year over year. Service sales (12.6% of net sales) of $674 million rose 19.1% year over year. While total company revenue expanded year over year, organic sales declined 1%, and foreign currency provided a 3% tailwind.
Momentum in Commercial HVAC helped set the tone, with data center demand standing out and management noting that backlog fully covers expected 2026 data center sales. On the orders front, Carrier saw strong momentum. Total company orders increased 11%, with Commercial HVAC orders up 35% and data center orders surging more than 500%.
Carrier Global Corporation Price, Consensus and EPS Surprise
Carrier Global Corporation price-consensus-eps-surprise-chart | Carrier Global Corporation Quote
CARR’s Quarter in Detail
Climate Solutions Americas remained the largest contributor, with revenues of $2.50 billion, down 3% year over year and 3% organic decline. Residential revenue was down about 12%, partially offset by strength in Light Commercial (up 9%) and Commercial (up 1% organically).
Climate Solutions Europe posted revenues of $1.29 billion, up 11% year over year, with organic sales flat. Management cited continued electrification trends and heat pump strength across Europe, though Commercial was down mid-single digits.
Climate Solutions Asia Pacific, Middle East & Africa revenue rose 1% year over year to $834 million, while organic sales fell 1% as China Residential and Light Commercial remained a headwind.
Climate Solutions Transportation revenue increased 10% year over year to $713 million. Organic sales increased 5% year over year with 38% growth in Container, partially offset by a decline in Global Truck and Trailer, down high single digits.
Carrier's Operating Details
Research & development (R&D) expenses decreased 6.5% year over year to $143 million. As a percentage of revenues, R&D expenses declined 30 basis points (bps) year over year. Selling, general & administrative (SG&A) expenses increased 18.1% year over year to $861 million. As a percentage of revenues, SG&A expenses expanded 210 bps year over year.
Adjusted operating margin contracted 510 bps on a year-over-year basis to 11.1%. Management tied the year-over-year pressure primarily to lower volume and under-absorption in the Americas Residential business and continued weakness in China Residential and Light Commercial.
At the segment level, Climate Solutions Americas' margin decreased to 14.9% from 22.2%, reflecting lower Residential sales and associated factory under-absorption. Climate Solutions Europe's margin declined to 6.9% from 9.0%, driven by lower Commercial volume and higher promotions, partially offset by productivity. Climate Solutions Asia Pacific, Middle East & Africa margin fell to 9.7% from 14.6% as China RLC weakness weighed, while the Transportation margin edged down to 14.2% from 14.9% due to an unfavorable mix.
CARR’s Balance Sheet
Carrier ended March 31, 2026, with cash and cash equivalents of $1.37 billion compared with $1.55 billion as of Dec. 31, 2025.
Total short-term borrowings plus current portion of long-term debt rose to $1.74 billion, while long-term debt stood at $10.42 billion.
Net cash provided by operating activities was $79 million, and free cash flow was an outflow of $15 million.
In the first quarter of 2025, CARR returned approximately $500 million to shareholders through dividends and repurchases.
Carrier Reaffirms 2026 Targets
Carrier reaffirmed its full-year 2026 guidance, calling for approximately $22 billion in sales, with organic growth flat to up low single digits.
The company continues to expect adjusted operating profit of roughly $3.4 billion, adjusted earnings of about $2.80 per share and free cash flow of around $2 billion.
CARR Zacks Rank & Stocks to Consider
Carrier currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks in the broader Zacks Construction sector include Janus International Group (JBI - Free Report) , Johnson Controls International (JCI - Free Report) , and Toll Brothers (TOL - Free Report) . Each stock currently carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Shares of Janus International Group have plunged 22.4% in the year-to-date period. Janus International Group is set to report the first quarter 2026 results on May 12.
Shares of Johnson Controls International have gained 21.4% in the year-to-date period. Johnson Controls International is slated to report second-quarter fiscal 2026 results on May 6.
Toll Brothers shares have gained 28.7% in the year-to-date period. Toll Brothers is set to report second-quarter fiscal 2026 results on May 20.