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Carrier (CARR) Q1 Earnings Beat Estimates, Revenues Fall Y/Y
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Carrier Global (CARR - Free Report) reported first-quarter 2020 adjusted earnings of 35 cents per share, which beat the Zacks Consensus Estimate by 84.2%. However, the figure decreased 27.1% year over year.
Net sales of $3.88 billion beat the consensus mark by 24.1%. However, the top line declined 10.1% year over year due to lower gas furnace sales and North America truck trailer sales as well as the wind-down of a residential intrusion business. Coronavirus also adversely impacted sales.
Product sales (80.9% of net sales) decreased 11.7% year over year to $3.15 billion. Product sales (19.1% of net sales) dipped 2.1% year over year to $741 million.
Quarterly Details
HVAC revenues (50.4% of net sales) decreased 9.6% year over year to $1.96 billion. Operating profit declined 18.5% from the year-ago quarter to $242 million.
Refrigeration revenues (20.8% of net sales) fell 16% from the year-ago quarter to $808 million. Operating profit plunged 23.8% to $99 million.
Carrier Global Corporation Price, Consensus and EPS Surprise
Fire & Safety revenues (31% of net sales) slid 6.5% from the year-ago quarter to $1.21 billion. Operating profit was $126 million, down 13.1% year over year.
Cost of goods sold was $2.24 billion, down 12.8% year over year. Moreover, cost of services sold slipped 0.6% to $529 million.
The downside can be attributed to Carrier’s aggressive cost-containment strategy and the acceleration of Carrier 600, a program expected to remove $600 million in costs in three years.
Both selling, general & administrative (SG&A) and research & development (R&D) expenses, as a percentage of revenues, increased 60 basis points (bps) and 10 bps each on a year-over-year basis.
Segmental operating profit in the first quarter declined 18.4% year over year to $467 million.
Adjusted operating profit fell 16.2% year over year to $436 million. Operating margin contracted 80 bps on a year-over-year basis to 11.2%.
Balance Sheet & Other Details
As of Mar 31, 2020, Carrier had cash and cash equivalents worth $768 million compared with $952 million as of Dec 31, 2019.
Total debt (including current portion) as of Mar 31, 2020 was $11.25 billion with no debt maturities until 2023.
In the first quarter, Carrier generated $47 million of cash from operating activities against the year-ago quarter’s cash outflow of $183 million. The company’s quarterly free cash outflow came in at $1 million compared with free cash outflow of $224 million in the year-ago quarter.
Outlook
Carrier identified $425 million in savings and plans a 40-50% reduction in capital spending.
Although the company withdrew its 2020 guidance on Apr 3, per management’s “reasonable scenario” sales are expected between $15 billion and $17 billion while adjusted operating profit in the $1.7-$2 billion range.
Zacks Rank & Stocks to Consider
Carrier currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are Logitech (LOGI - Free Report) , Grid Dynamics (GDYN - Free Report) and Plantronics . While Logitech sports a Zacks Rank #1 (Strong Buy), both Grid Dynamics and Plantronics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Both Logitech and Grid Dynamics are set to report quarterly results on May 11, while Plantronics will release earnings on May 21.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
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Carrier (CARR) Q1 Earnings Beat Estimates, Revenues Fall Y/Y
Carrier Global (CARR - Free Report) reported first-quarter 2020 adjusted earnings of 35 cents per share, which beat the Zacks Consensus Estimate by 84.2%. However, the figure decreased 27.1% year over year.
Net sales of $3.88 billion beat the consensus mark by 24.1%. However, the top line declined 10.1% year over year due to lower gas furnace sales and North America truck trailer sales as well as the wind-down of a residential intrusion business. Coronavirus also adversely impacted sales.
Product sales (80.9% of net sales) decreased 11.7% year over year to $3.15 billion. Product sales (19.1% of net sales) dipped 2.1% year over year to $741 million.
Quarterly Details
HVAC revenues (50.4% of net sales) decreased 9.6% year over year to $1.96 billion. Operating profit declined 18.5% from the year-ago quarter to $242 million.
Refrigeration revenues (20.8% of net sales) fell 16% from the year-ago quarter to $808 million. Operating profit plunged 23.8% to $99 million.
Carrier Global Corporation Price, Consensus and EPS Surprise
Carrier Global Corporation price-consensus-eps-surprise-chart | Carrier Global Corporation Quote
Fire & Safety revenues (31% of net sales) slid 6.5% from the year-ago quarter to $1.21 billion. Operating profit was $126 million, down 13.1% year over year.
Cost of goods sold was $2.24 billion, down 12.8% year over year. Moreover, cost of services sold slipped 0.6% to $529 million.
The downside can be attributed to Carrier’s aggressive cost-containment strategy and the acceleration of Carrier 600, a program expected to remove $600 million in costs in three years.
Both selling, general & administrative (SG&A) and research & development (R&D) expenses, as a percentage of revenues, increased 60 basis points (bps) and 10 bps each on a year-over-year basis.
Segmental operating profit in the first quarter declined 18.4% year over year to $467 million.
Adjusted operating profit fell 16.2% year over year to $436 million. Operating margin contracted 80 bps on a year-over-year basis to 11.2%.
Balance Sheet & Other Details
As of Mar 31, 2020, Carrier had cash and cash equivalents worth $768 million compared with $952 million as of Dec 31, 2019.
Total debt (including current portion) as of Mar 31, 2020 was $11.25 billion with no debt maturities until 2023.
In the first quarter, Carrier generated $47 million of cash from operating activities against the year-ago quarter’s cash outflow of $183 million. The company’s quarterly free cash outflow came in at $1 million compared with free cash outflow of $224 million in the year-ago quarter.
Outlook
Carrier identified $425 million in savings and plans a 40-50% reduction in capital spending.
Although the company withdrew its 2020 guidance on Apr 3, per management’s “reasonable scenario” sales are expected between $15 billion and $17 billion while adjusted operating profit in the $1.7-$2 billion range.
Zacks Rank & Stocks to Consider
Carrier currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the broader technology sector are Logitech (LOGI - Free Report) , Grid Dynamics (GDYN - Free Report) and Plantronics . While Logitech sports a Zacks Rank #1 (Strong Buy), both Grid Dynamics and Plantronics carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Both Logitech and Grid Dynamics are set to report quarterly results on May 11, while Plantronics will release earnings on May 21.
Biggest Tech Breakthrough in a Generation
Be among the early investors in the new type of device that experts say could impact society as much as the discovery of electricity. Current technology will soon be outdated and replaced by these new devices. In the process, it’s expected to create 22 million jobs and generate $12.3 trillion in activity.
A select few stocks could skyrocket the most as rollout accelerates for this new tech. Early investors could see gains similar to buying Microsoft in the 1990s. Zacks’ just-released special report reveals 8 stocks to watch. The report is only available for a limited time.
See 8 breakthrough stocks now>>