Carrier Reports Strong Second Quarter 2024 Results

Rhea-AI Summary

Carrier Global (NYSE:CARR) reported strong Q2 2024 results, with net sales of $6.7 billion, up 12% year-over-year. Organic sales grew 2%, while the Viessmann Climate Solutions acquisition contributed approximately 12%. GAAP EPS increased significantly to $2.55, and adjusted EPS rose to $0.87, up double-digits. The company expanded GAAP operating margin significantly and adjusted operating margin by 200 basis points.

Carrier reaffirmed its full-year 2024 adjusted EPS guidance range and closed two of four planned business exit transactions. The company plans to repurchase about $1 billion worth of shares in the second half of 2024. Carrier's strong operational execution and portfolio transformation progress have enabled a reduction in net debt by about $5 billion in the quarter.

Positive

• Net sales increased 12% to $6.7 billion in Q2 2024
• Organic sales growth of 2% in Q2 2024
• GAAP EPS rose significantly to $2.55
• Adjusted EPS increased to $0.87, up double-digits
• Adjusted operating margin expanded by 200 basis points
• Closed two of four planned business exit transactions
• Reduced net debt by about $5 billion in Q2
• Plans to repurchase about $1 billion worth of shares in H2 2024
• Free cash flow of $549 million in Q2

Negative

• Viessmann Climate Solutions sales down almost 30% year-over-year in Q2
• HVAC sales in Asia Pacific down high-single-digits
• Lowered full-year 2024 sales guidance from ~$26B to ~$25.5B

Insights

Financial Analyst

Carrier's Q2 2024 results demonstrate robust financial performance and strategic progress. The 12% increase in net sales to $6.7 billion, including 2% organic growth, is impressive. The adjusted EPS of $0.87, up double-digits and the 200 basis points expansion in adjusted operating margin are particularly noteworthy.

Key highlights:

• Strong organic growth in HVAC Americas, especially in Commercial and Light Commercial segments
• Successful integration of Viessmann Climate Solutions, contributing 12% to sales growth
• Impressive free cash flow of $549 million
• Significant debt reduction of about $5 billion in the quarter

The planned $1 billion share repurchase in H2 2024 signals confidence in the company's financial position and future prospects. However, investors should note the 30% year-over-year decline in Viessmann Climate Solutions, partially due to lower solar PV sales.

The reaffirmed full-year 2024 adjusted EPS guidance of $2.80 to $2.90 suggests management's confidence in maintaining this strong performance. The expected free cash flow of $0.4 billion, despite $2 billion in tax payments, demonstrates the company's solid cash generation capabilities.

Overall, Carrier's Q2 results and outlook paint a picture of a company successfully navigating market challenges while executing on its strategic initiatives.

Market Research Analyst

Carrier's Q2 2024 results offer valuable insights into broader market trends. The company's performance across different segments and regions provides a window into the global HVAC and refrigeration markets:

• Strong growth in Commercial and Light Commercial HVAC in the Americas indicates a robust non-residential construction sector
• Mid-single digit growth in North America Residential HVAC suggests a resilient housing market
• EMEA's mixed performance, with strong Commercial HVAC but declining Residential and Light Commercial, points to regional economic variations
• The decline in China's residential light commercial segment may signal broader economic challenges in the region
• Over 30% growth in container refrigeration contrasts with softness in North America truck and trailer, indicating shifting dynamics in global logistics and transportation

The 30% year-over-year decline in Viessmann Climate Solutions, partly due to lower solar PV sales, may reflect challenges in the European renewable energy market. This could be a result of changing government incentives or supply chain issues affecting the solar industry.

Carrier's success in outperforming its markets, as mentioned by CEO David Gitlin, suggests effective strategic positioning. The company's portfolio transformation, including the exit from four businesses, aligns with broader industry trends towards focus and specialization.

The planned share repurchase and strong margin expansion demonstrate a focus on shareholder value, which could attract investor interest in the industrial sector. However, the $2 billion in expected tax payments on gains from business exits highlights the short-term costs of strategic realignment.

• Net sales of $6.7 billion up 12% versus second quarter 2023; organic sales up 2%
• GAAP EPS of $2.55 up significantly and adjusted EPS of $0.87 up double-digits
• GAAP operating margin expanded significantly year over year; adjusted operating margin expanded 200 bps
• Reaffirming full year 2024 adjusted EPS guidance range
• Closed two of four business exit transactions; remaining two on-track
• Expect to repurchase about $1 billion worth of shares in the second half of 2024

PALM BEACH GARDENS, Fla., July 25, 2024 /PRNewswire/ -- Carrier Global Corporation (NYSE:CARR), global leader in intelligent climate and energy solutions, today reported strong financial results for the second quarter of 2024 and reaffirmed its full year earnings guidance.

"Carrier delivered another quarter of strong financial performance, while making great progress with our portfolio transformation," said Carrier Chairman & CEO David Gitlin. "We delivered solid sales and roughly 30% orders growth as we continue to outperform in our markets. Our strong operational execution drove 200 basis points of adjusted operating margin expansion and double-digit adjusted earnings growth. Year-to-date, we also closed on two of our four business exits, and the remaining two continue to track well. The proceeds from the exits, combined with our strong free cash flow performance, have enabled us to reduce net debt by about $5 billion in the quarter and we now plan to repurchase about $1 billion of shares in the second half of 2024."

Second Quarter 2024 Results

Carrier's second quarter sales of $6.7 billion were up 12% compared to the prior year including 2% organic growth and approximately 12% contribution from the acquisition of Viessmann Climate Solutions offset by about 2% from divestitures. Foreign currency translation had a 1% negative impact on sales. Organic sales in the HVAC segment were up 2%. HVAC sales in the Americas were up mid-single digits driven by continued strength in Commercial and Light Commercial businesses both of which were up double-digits. North America Residential HVAC sales were up about mid-single digits. HVAC organic sales in EMEA were up low-single-digits with Commercial HVAC up mid-teens, offsetting a decline in EMEA Residential and Light Commercial HVAC. These organic figures exclude the contribution of Viessmann Climate Solutions which was down almost 30% year-over-year in the quarter, roughly one third of which was driven by lower solar PV sales.  HVAC sales in Asia Pacific were down high-single-digits with declines driven by residential light commercial in China, partially offset by Southeast Asia which was up double-digits. Refrigeration sales were up 1% organically driven by over 30% growth in container, mostly offset by North America truck and trailer and commercial refrigeration. Fire and Security showed broad-based growth and sales were up 3% organically in the quarter. The residential and commercial fire organic sales, the last of our four business exits, were up mid-single digits. 

GAAP operating profit in the quarter of $3.7 billion was up over 650% from last year primarily due to the gain on the sale of Access Solutions and the addition of Viessmann Climate Solutions. Adjusted operating profit of $1.2 billion was up 26%, mostly driven by the addition of Viessmann Climate Solutions.

Net income was $2.3 billion and adjusted net income was $793 million. GAAP EPS was $2.55 and adjusted EPS was $0.87. Net cash flows generated from operating activities were $660 million and capital expenditures were $111 million, resulting in free cash flow of $549 million. During the second-quarter, Carrier received $5.0 billion in cash proceeds from the sale of Access Solutions, redeemed $1.0 billion of its long-term notes, and repaid €2.3 billion of its term-loans.

Full-Year 2024 Guidance**

Carrier updated the following guidance for 2024, which now includes Commercial Refrigeration for nine-months.

	Current Guidance	Prior Guidance
Sales	~$25.5B Organic* up MSD FX (1%) Acquisitions +16% Divestitures (5%)	~$26B Organic* up MSD FX (0%) Acquisitions +18% Divestitures (6%)
Adjusted Operating Margin*	~15.5%	~15.5%
Adjusted EPS*	$2.80 - $2.90	$2.80 - $2.90
Free Cash Flow*	~$0.4B Includes ~$2B of expected tax payments on the gains from the announced business exits, restructuring, and transaction-related costs	~$0.4B Includes ~$2B of expected tax payments on the gains from the announced business exits, restructuring, and transaction-related costs

 

*Note: When the company provides expectations for organic sales, adjusted operating profit, adjusted operating margin, adjusted EPS and free cash flow on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures generally is not available without unreasonable effort. See "Use and Definitions of Non-GAAP Financial Measures" below for additional information.

**As of July 25, 2024

Conference Call

Carrier will host a webcast of its earnings conference call today, Thursday, July 25, 2024, at 7:30 a.m. ET. To access the webcast, visit the Events & Presentations section of the Carrier Investor Relations site at ir.carrier.com/news-and-events/events-and-presentations or to listen to the earnings call by phone, participants must pre-register at Carrier Earnings Call Registration. All registrants will receive dial-in information and a PIN allowing access to the live call.

Cautionary Statement
This communication contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. These forward-looking statements are intended to provide management's current expectations or plans for Carrier's future operating and financial performance, based on assumptions currently believed to be valid. Forward-looking statements can be identified by the use of words such as "believe," "expect," "expectations," "plans," "strategy," "prospects," "estimate," "project," "target," "anticipate," "will," "should," "see," "guidance," "outlook," "confident," "scenario" and other words of similar meaning in connection with a discussion of future operating or financial performance. Forward-looking statements may include, among other things, statements relating to future sales, earnings, cash flow, results of operations, uses of cash, share repurchases, tax rates and other measures of financial performance or potential future plans, strategies or transactions of Carrier, our portfolio transformation and the use of the anticipated proceeds thereof, potential future investments, Carrier's plans with respect to its indebtedness and other statements that are not historical facts. All forward-looking statements involve risks, uncertainties and other factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements. For additional information on identifying factors that may cause actual results to vary materially from those stated in forward-looking statements, see Carrier's reports on Forms 10-K, 10-Q and 8-K filed with or furnished to the U.S. Securities and Exchange Commission from time to time. Any forward-looking statement speaks only as of the date on which it is made, and Carrier assumes no obligation to update or revise such statement, whether as a result of new information, future events or otherwise, except as required by applicable law.

About Carrier
Carrier Global Corporation, global leader in intelligent climate and energy solutions, is committed to creating solutions that matter for people and our planet for generations to come. From the beginning, we've led in inventing new technologies and entirely new industries. Today, we continue to lead because we have a world-class, diverse workforce that puts the customer at the center of everything we do. For more information, visit corporate.carrier.com or follow Carrier on social media at @Carrier.

CARR-IR

Contact:
	Investor Relations
	Sam Pearlstein
	561-365-2251
	Sam.Pearlstein@Carrier.com
	Media Inquiries
	Rob Six
	561-281-2362
	Rob.Six@Carrier.com

 

SELECTED FINANCIAL DATA, NON-GAAP MEASURES AND DEFINITIONS

Following are tables that present selected financial data of Carrier Global Corporation ("Carrier"). Also included are reconciliations of non-GAAP measures to their most comparable GAAP measures.

Use and Definitions of Non-GAAP Financial Measures
Carrier Global Corporation ("Carrier") reports its financial results in accordance with accounting principles generally accepted in the United States ("GAAP"). We supplement the reporting of our financial information determined under GAAP with certain non-GAAP financial information. The non-GAAP information presented provides investors with additional useful information, but should not be considered in isolation or as substitutes for the related GAAP measures. Moreover, other companies may define non-GAAP measures differently, which limits the usefulness of these measures for comparisons with such other companies. We encourage investors to review our financial statements and publicly filed reports in their entirety and not to rely on any single financial measure. A reconciliation of the non-GAAP measures to the corresponding amounts prepared in accordance with GAAP appears in the tables in this Appendix. The tables provide additional information as to the items and amounts that have been excluded from the adjusted measures.

Organic sales, adjusted operating profit, adjusted operating margin, incremental margins / earnings conversion, earnings before interest, taxes and depreciation and amortization ("EBITDA"), adjusted EBITDA, adjusted net income, adjusted earnings per share ("EPS"), adjusted interest expense, net, adjusted effective tax rate and net debt are non-GAAP financial measures.

Organic sales represents consolidated net sales (a GAAP measure), excluding the impact of foreign currency translation, acquisitions and divestitures completed in the preceding twelve months and other significant items of a nonoperational nature (hereinafter referred to as "other significant items"). Adjusted operating profit represents operating profit (a GAAP measure), excluding restructuring costs, amortization of acquired intangibles and other significant items. Adjusted operating margin represents adjusted operating profit as a percentage of net sales (a GAAP measure). Incremental margins / earnings conversion represents the year-over-year change in adjusted operating profit divided by the year-over-year change in net sales. EBITDA represents net income attributable to common shareholders (a GAAP measure), adjusted for interest income and expense, income tax expense, and depreciation and amortization. Adjusted EBITDA represents EBITDA, as calculated above, excluding non-service pension benefit, non-controlling interest in subsidiaries' earnings from operations, restructuring costs and other significant items. Adjusted net income represents net income attributable to common shareowners (a GAAP measure), excluding restructuring costs, amortization of acquired intangibles and other significant items. Adjusted EPS represents diluted earnings per share (a GAAP measure), excluding restructuring costs, amortization of acquired intangibles and other significant items. Adjusted interest expense, net represents interest expense (a GAAP measure) and interest income (a GAAP measure), net excluding other significant items. The adjusted effective tax rate represents the effective tax rate (a GAAP measure), excluding restructuring costs, amortization of acquired intangibles and other significant items. Net debt represents long-term debt (a GAAP measure) less cash and cash equivalents (a GAAP measure). For the business segments, when applicable, adjustments of operating profit and operating margins represent operating profit, excluding restructuring, amortization of acquired intangibles and other significant items.

Free cash flow is a non-GAAP financial measure that represents net cash flows provided by operating activities (a GAAP measure) less capital expenditures. Management believes free cash flow is a useful measure of liquidity and an additional basis for assessing Carrier's ability to fund its activities, including the financing of acquisitions, debt service, repurchases of Carrier's common stock and distribution of earnings to shareowners.

Orders are contractual commitments with customers to provide specified goods or services for an agreed upon price and may not be subject to penalty if cancelled.

When we provide our expectations for organic sales, adjusted operating profit, adjusted operating margin, adjusted interest expense, net, adjusted effective tax rate, incremental margins/earnings conversion, EBITDA, adjusted EBITDA, adjusted EPS and free cash flow on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures (expected net sales, operating profit, operating margin, interest expense, effective tax rate, incremental operating margin, net income attributable to common shareowners, diluted EPS and net cash flows provided by operating activities) generally is not available without unreasonable effort due to potentially high variability, complexity and low visibility as to the items that would be excluded from the GAAP measure in the relevant future period, such as unusual gains and losses, the ultimate outcome of pending litigation, fluctuations in foreign currency exchange rates, the impact and timing of potential acquisitions and divestitures, future restructuring costs, and other structural changes or their probable significance. The variability of the excluded items may have a significant, and potentially unpredictable, impact on our future GAAP results.

 

Carrier Global Corporation Condensed Consolidated Statement of Operations
		(Unaudited)
		Three Months Ended June 30,				Six Months Ended  June 30,
(In millions, except per share amounts)		2024		2023		2024		2023
Net sales
Product sales		$         6,004		$         5,355		$       11,546		$       10,041
Service sales		685		637		1,325		1,224
Total Net sales		6,689		5,992		12,871		11,265
Costs and expenses
Cost of products sold		(4,296)		(3,769)		(8,294)		(7,227)
Cost of services sold		(515)		(468)		(994)		(905)
Research and development		(187)		(151)		(411)		(290)
Selling, general and administrative		(975)		(784)		(1,960)		(1,505)
Total Costs and expenses		(5,973)		(5,172)		(11,659)		(9,927)
Equity method investment net earnings		90		52		121		96
Other income (expense), net		2,885		(383)		2,858		(390)
Operating profit		3,691		489		4,191		1,044
Non-service pension (expense) benefit		(1)		—		(1)		—
Interest (expense) income, net		(166)		(67)		(331)		(113)
Income from operations before income taxes		3,524		422		3,859		931
Income tax (expense) benefit		(1,155)		(189)		(1,201)		(311)
Net income from operations		2,369		233		2,658		620
Less: Non-controlling interest in subsidiaries' earnings from operations		32		34		52		48
Net income attributable to common shareowners		$         2,337		$            199		$         2,606		$            572
Earnings per share
Basic		$           2.59		$           0.24		$           2.90		$           0.68
Diluted		$           2.55		$           0.23		$           2.85		$           0.67
Weighted-average number of shares outstanding
Basic		902.4		836.0		900.2		835.5
Diluted		915.3		850.9		913.6		851.5

 

Carrier Global Corporation Condensed Consolidated Balance Sheet
		(Unaudited)
(In millions)		June 30, 2024		December 31, 2023
Assets
Cash and cash equivalents		$                   2,919		$                    10,015
Accounts receivable, net		3,187		2,481
Contract assets		333		306
Inventories, net		3,045		2,217
Assets held for sale		1,601		3,314
Other current assets		488		447
Total current assets		11,573		18,780
Future income tax benefits		939		739
Fixed assets, net		3,117		2,293
Operating lease right-of-use assets		635		491
Intangible assets, net		7,048		1,028
Goodwill		15,245		7,989
Pension and post-retirement assets		81		32
Equity method investments		1,221		1,140
Other assets		565		330
Total Assets		$                 40,424		$                    32,822
Liabilities and Equity
Accounts payable		$                   3,181		$                      2,742
Accrued liabilities		4,262		2,811
Contract liabilities		493		425
Liabilities held for sale		687		862
Current portion of long-term debt		2,080		51
Total current liabilities		10,703		6,891
Long-term debt		11,242		14,242
Future pension and post-retirement obligations		247		155
Future income tax obligations		2,184		535
Operating lease liabilities		501		391
Other long-term liabilities		1,468		1,603
Total Liabilities		26,345		23,817
Equity
Common stock		9		9
Treasury stock		(1,972)		(1,972)
Additional paid-in capital		8,563		5,535
Retained earnings		8,854		6,591
Accumulated other comprehensive loss		(1,686)		(1,486)
Non-controlling interest		311		328
Total Equity		14,079		9,005
Total Liabilities and Equity		$                 40,424		$                    32,822

 

Carrier Global Corporation Condensed Consolidated Statement of Cash Flows
		Six Months Ended  June 30,
(In millions)		2024		2023
Operating Activities
Net income from operations		$         2,658		$            620
Adjustments to reconcile net income to net cash flows from operating activities:
Depreciation and amortization		625		273
Deferred income tax provision		(338)		(110)
Stock-based compensation costs		48		40
Equity method investment net earnings		(121)		(96)
(Gain) loss on sale of investments / deconsolidation		(2,881)		276
Changes in operating assets and liabilities
Accounts receivable, net		(286)		(406)
Contract assets		(62)		(40)
Inventories, net		(2)		(59)
Other current assets		(52)		(105)
Accounts payable and accrued liabilities		1,118		120
Contract liabilities		(19)		37
Distributions from equity method investments		12		10
Other operating activities, net		—		(56)
Net cash flows provided by (used in) operating activities		700		504
Investing Activities
Capital expenditures		(215)		(144)
Investment in businesses, net of cash acquired		(10,779)		(56)
Dispositions of businesses		4,877		36
Settlement of derivative contracts, net		(185)		(14)
Kidde-Fenwal, Inc. deconsolidation		—		(134)
Other investing activities, net		29		16
Net cash flows provided by (used in) investing activities		(6,273)		(296)
Financing Activities
Increase (decrease) in short-term borrowings, net		—		(19)
Issuance of long-term debt		2,555		6
Repayment of long-term debt		(3,542)		(12)
Repurchases of common stock		—		(62)
Dividends paid on common stock		(330)		(309)
Dividends paid to non-controlling interest		(67)		(41)
Other financing activities, net		(22)		(69)
Net cash flows provided by (used in) financing activities		(1,406)		(506)
Effect of foreign exchange rate changes on cash and cash equivalents		(82)		(13)
Net increase (decrease) in cash and cash equivalents and restricted cash, including cash classified in current assets held for sale		(7,061)		(311)
Less: Change in cash balances classified as assets held for sale		34		—
Net increase (decrease) in cash and cash equivalents and restricted cash		(7,095)		(311)
Cash, cash equivalents and restricted cash, beginning of period		10,017		3,527
Cash, cash equivalents and restricted cash, end of period		2,922		3,216
Less: restricted cash		3		7
Cash and cash equivalents, end of period		$         2,919		$         3,209

 

Carrier Global Corporation Segment Net Sales and Operating Profit
	(Unaudited)
	Three Months Ended June 30,								Six Months Ended June 30,
	2024				2023				2024				2023
(In millions)	Reported		Adjusted		Reported		Adjusted		Reported		Adjusted		Reported		Adjusted
Net sales
HVAC	$    4,970		$    4,970		$    4,216		$    4,216		$    9,511		$    9,511		$    7,838		$    7,838
Refrigeration	973		973		972		972		1,857		1,857		1,870		1,870
Fire & Security	871		871		932		932		1,758		1,758		1,801		1,801
Segment sales	6,814		6,814		6,120		6,120		13,126		13,126		11,509		11,509
Eliminations and other	(125)		(125)		(128)		(128)		(255)		(255)		(244)		(244)
Net sales	$    6,689		$    6,689		$    5,992		$    5,992		$  12,871		$  12,871		$  11,265		$  11,265
Operating profit
HVAC	$       687		$       991		$       742		$       791		$    1,116		$    1,711		$    1,177		$    1,281
Refrigeration	113		118		112		119		210		217		220		230
Fire & Security	3,001		155		(157)		137		3,154		319		(64)		245
Segment operating profit	3,801		1,264		697		1,047		4,480		2,247		1,333		1,756
Eliminations and other	(23)		(20)		(146)		(35)		(98)		(54)		(184)		(71)
General corporate expenses	(87)		(31)		(62)		(48)		(191)		(53)		(105)		(79)
Operating profit	$    3,691		$    1,213		$       489		$       964		$    4,191		$    2,140		$    1,044		$    1,606
Operating  margin
HVAC	13.8 %		19.9 %		17.6 %		18.8 %		11.7 %		18.0 %		15.0 %		16.3 %
Refrigeration	11.6 %		12.1 %		11.5 %		12.2 %		11.3 %		11.7 %		11.8 %		12.3 %
Fire & Security	344.5 %		17.8 %		(16.8) %		14.7 %		179.4 %		18.1 %		(3.6) %		13.6 %
Total Carrier	55.2 %		18.1 %		8.2 %		16.1 %		32.6 %		16.6 %		9.3 %		14.3 %

 

Carrier Global Corporation Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Operating Profit
	(Unaudited)
	Three Months Ended June 30, 2024
(In millions)	HVAC		Refrigeration		Fire & Security		Eliminations and Other		General Corporate Expenses		Carrier
Net sales	$      4,970		$            973		$         871		$            (125)		$                —		$      6,689
Segment operating profit	$         687		$            113		$      3,001		$              (23)		$              (87)		$      3,691
Reported operating margin	13.8 %		11.6 %		344.5 %						55.2 %
Adjustments to segment operating profit:
Restructuring costs	$           25		$                1		$             3		$                  3		$                —		$           32
Amortization of acquired intangibles	170		—		—		—		—		170
Acquisition step-up amortization (1)	109		—		—		—		—		109
Acquisition/divestiture-related costs	—		4		32		—		56		92
Access Solutions gain	—		—		(2,881)		—		—		(2,881)
Total adjustments to operating profit	$         304		$                5		$    (2,846)		$                  3		$                56		$    (2,478)
Adjusted operating profit	$         991		$            118		$         155		$              (20)		$              (31)		$      1,213
Adjusted operating margin	19.9 %		12.1 %		17.8 %						18.1 %
	(Unaudited)
	Three Months Ended June 30, 2023
(In millions)	HVAC		Refrigeration		Fire & Security		Eliminations and Other		General Corporate Expenses		Carrier
Net sales	$      4,216		$            972		$         932		$            (128)		$                —		$       5,992
Segment operating profit	$         742		$            112		$       (157)		$            (146)		$              (62)		$          489
Reported operating margin	17.6 %		11.5 %		(16.8) %						8.2 %
Adjustments to segment operating profit:
Restructuring costs	$             3		$                7		$           (1)		$                —		$                —		$              9
Amortization of acquired intangibles	36		—		2		—		—		38
Acquisition step-up amortization (1)	10		—		—		—		—		10
Acquisition/divestiture-related costs	—		—		—		—		14		14
Viessmann-related hedges	—		—		—		111		—		111
KFI deconsolidation	—		—		293		—		—		293
Total adjustments to operating profit	$           49		$                7		$         294		$              111		$                14		$          475
Adjusted operating profit	$         791		$            119		$         137		$              (35)		$              (48)		$          964
Adjusted operating margin	18.8 %		12.2 %		14.7 %						16.1 %
(1) Amortization of the step-up to fair value of acquired inventory and backlog.

 

Carrier Global Corporation Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Operating Profit
	(Unaudited)
	Six Months Ended June 30, 2024
(In millions)	HVAC		Refrigeration		Fire & Security		Eliminations and Other		General Corporate Expenses		Carrier
Net sales	$      9,511		$         1,857		$      1,758		$            (255)		$                —		$    12,871
Segment operating profit	$      1,116		$            210		$      3,154		$              (98)		$            (191)		$      4,191
Reported operating margin	11.7 %		11.3 %		179.4 %						32.6 %
Adjustments to segment operating profit:
Restructuring costs	$           32		$                1		$           10		$                  4		$                —		$           47
Amortization of acquired intangibles	342		—		—		—		—		342
Acquisition step-up amortization (1)	220		—		—		—		—		220
Acquisition/divestiture-related costs	1		6		36		—		138		181
Viessmann-related hedges	—		—		—		86		—		86
Gain on liability adjustment (2)	—		—		—		(46)		—		(46)
Access Solutions gain	—		—		(2,881)		—		—		(2,881)
Total adjustments to operating profit	$         595		$                7		$    (2,835)		$                44		$              138		$    (2,051)
Adjusted operating profit	$      1,711		$            217		$         319		$              (54)		$              (53)		$      2,140
Adjusted operating margin	18.0 %		11.7 %		18.1 %						16.6 %
	(Unaudited)
	Six Months Ended June 30, 2023
(In millions)	HVAC		Refrigeration		Fire & Security		Eliminations and Other		General Corporate Expenses		Carrier
Net sales	$      7,838		$         1,870		$      1,801		$            (244)		$                —		$     11,265
Segment operating profit	$      1,177		$            220		$         (64)		$            (184)		$            (105)		$       1,044
Reported operating margin	15.0 %		11.8 %		(3.6) %						9.3 %
Adjustments to segment operating profit:
Restructuring costs	$             2		$              10		$           12		$                  2		$                —		$            26
Amortization of acquired intangibles	73		—		4		—		—		77
Acquisition step-up amortization (1)	21		—		—		—		—		21
Acquisition/divestiture-related costs	—		—		—		—		26		26
Viessmann-related hedges	—		—		—		111		—		111
TCC acquisition-related gain (3)	8		—		—		—		—		8
KFI deconsolidation	—		—		293		—		—		293
Total adjustments to operating profit	$         104		$              10		$         309		$              113		$                26		$          562
Adjusted operating profit	$      1,281		$            230		$         245		$              (71)		$              (79)		$       1,606
Adjusted operating margin	16.3 %		12.3 %		13.6 %						14.3 %
(1) Amortization of the step-up to fair value of acquired inventory and backlog. (2) Gain associated with an adjustment to our tax-related liability owed to UTC. (3)  The carrying value of our previously held TCC equity investments were recognized at fair value and subsequently adjusted.

 

Carrier Global Corporation Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Results Net Income, Earnings Per Share and Effective Tax Rate
	(Unaudited)
	Three Months Ended June 30, 2024						Six Months Ended June 30, 2024
(In millions, except per share amounts)	Reported		Adjustments		Adjusted		Reported		Adjustments		Adjusted
Net sales	$       6,689		$              —		$       6,689		$  12,871		$              —		$ 12,871
Operating profit	$       3,691		(2,478)	a	$       1,213		$    4,191		(2,051)	a	$   2,140
Operating margin	55.2 %				18.1 %		32.6 %				16.6 %
Income from operations before income taxes	$       3,524		(2,466)	a,b	$       1,058		$    3,859		(2,039)	a,b	$   1,820
Income tax expense	$     (1,155)		922	c	$        (233)		$  (1,201)		791	c	$    (410)
Effective tax rate	32.8 %				22.0 %		31.1 %				22.5 %
Net income attributable to common shareowners	$       2,337		$       (1,544)		$          793		$    2,606		$       (1,248)		$   1,358
Summary of Adjustments:
Restructuring costs			$              32	a					$              47	a
Amortization of acquired intangibles			170	a					342	a
Acquisition step-up amortization (1)			109	a					220	a
Acquisition/divestiture-related costs			92	a					181	a
Access Solutions gain			(2,881)	a					(2,881)	a
Viessmann-related hedges			—	a					86	a
Gain on liability adjustment (2)			—	a					(46)	a
Debt prepayment costs			12	b					12	b
Total adjustments			$       (2,466)						$       (2,039)
Tax effect on adjustments above			$            976						$            880
Tax specific adjustments			(54)						(89)
Total tax adjustments			$            922	c					$            791	c
Shares outstanding - Diluted	915.3				915.3		913.6				913.6
Earnings per share - Diluted	$         2.55				$         0.87		$      2.85				$     1.49
(1) Amortization of the step-up to fair value of acquired inventory and backlog. (2) Gain associated with an adjustment to our tax-related liability owed to UTC.

 

Carrier Global Corporation Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Results Net Income, Earnings Per Share and Effective Tax Rate
	(Unaudited)
	Three Months Ended June 30, 2023						Six Months Ended June 30, 2023
(In millions, except per share amounts)	Reported		Adjustments		Adjusted		Reported		Adjustments		Adjusted
Net sales	$    5,992		$                —		$       5,992		$  11,265		$                —		$   11,265
Operating profit	$       489		475	a	$          964		$    1,044		562	a	$     1,606
Operating margin	8.2 %				16.1 %		9.3 %				14.3 %
Income from operations before income taxes	$       422		496	a,b	$          918		$       931		583	a,b	$     1,514
Income tax expense	$     (189)		(25)	c	$        (214)		$     (311)		(43)	c	$      (354)
Effective tax rate	44.8 %				23.3 %		33.4 %				23.4 %
Net income attributable to common shareowners	$       199		$              471		$          670		$       572		$              540		$     1,112
Summary of Adjustments:
Restructuring costs			$                  9	a					$                26	a
Amortization of acquired intangibles			38	a					77	a
Acquisition step-up amortization (1)			10	a					21	a
Acquisition/divestiture-related costs			14	a					26	a
Viessmann-related hedges			111	a					111	a
TCC acquisition-related gain (2)			—	a					8	a
KFI deconsolidation			293	a					293	a
Bridge loan financing costs			21	b					21	b
Total adjustments			$              496						$              583
Tax effect on adjustments above			$              (25)						$              (43)
Total tax adjustments			$              (25)	c					$              (43)	c
Shares outstanding - Diluted	850.9				850.9		851.5				851.5
Earnings per share - Diluted	$      0.23				$         0.79		$      0.67				$       1.31
(1) Amortization of the step-up to fair value of acquired inventory and backlog. (2) The carrying value of our previously held TCC equity investments were recognized at fair value at the TCC acquisition date.

 

Carrier Global Corporation Reconciliation of Reported (GAAP) to Adjusted (Non-GAAP) Results
Components of Changes in Net Sales
Three Months Ended June 30, 2024 Compared with Three Months Ended June 30, 2023
	(Unaudited)
	Factors Contributing to Total % change in Net Sales
	Organic		FX Translation		Acquisitions / Divestitures, net		Other		Total
HVAC	2 %		(1) %		17 %		— %		18 %
Refrigeration	1 %		(1) %		— %		— %		— %
Fire & Security	3 %		— %		(10) %		— %		(7) %
Consolidated	2 %		(1) %		11 %		— %		12 %

 

Six Months Ended June 30, 2024 Compared with Six Months Ended June 30, 2023
	(Unaudited)
	Factors Contributing to Total % change in Net Sales
	Organic		FX Translation		Acquisitions / Divestitures, net		Other		Total
HVAC	2 %		(1) %		20 %		— %		21 %
Refrigeration	(1) %		— %		— %		— %		(1) %
Fire & Security	5 %		— %		(7) %		— %		(2) %
Consolidated	2 %		(1) %		13 %		— %		14 %

 

Historical Amounts of Amortization of Acquired Intangibles
		(Unaudited)
		Q1		Q2		Q3		Q4		FY		Q1		Q2
(In millions)		2023		2023		2023		2023		2023		2024		2024
HVAC		$           37		$           36		$           35		$           35		$         143		$         172		$         170
Fire & Security		2		2		2		—		6		—		—
Total Carrier		39		38		37		35		149		172		170
Associated tax effect		(12)		(11)		(11)		(11)		(45)		(46)		(42)
Net impact to adjusted results		$           27		$           27		$           26		$           24		$         104		$         126		$         128

 

Free Cash Flow Reconciliation
		(Unaudited)
		Q1		Q2		Q3		Q4		FY		Q1		Q2
(In millions)		2023		2023		2023		2023		2023		2024		2024
Net cash flows provided by (used in) operating activities		$         120		$         384		$      1,041		$      1,062		$      2,607		$           40		$         660
Less: Capital expenditures		70		74		92		233		469		104		111
Free cash flow		$           50		$         310		$         949		$         829		$      2,138		$         (64)		$         549

 

Net Debt Reconciliation
		(Unaudited)
(In millions)		June 30, 2024		December 31, 2023
Long-term debt		$                     11,270		$                     14,242
Current portion of long-term debt		2,052		51
Less: Cash and cash equivalents		2,919		10,015
Net debt		$                     10,403		$                       4,278

 

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SOURCE Carrier Global Corporation

FAQ

What were Carrier's (CARR) Q2 2024 financial results?

Carrier reported net sales of $6.7 billion, up 12% year-over-year, with organic sales growth of 2%. GAAP EPS was $2.55, and adjusted EPS was $0.87, both showing significant increases from the previous year.

How did Carrier's (CARR) HVAC segment perform in Q2 2024?

Carrier's HVAC segment saw organic sales up 2% in Q2 2024. HVAC sales in the Americas were up mid-single digits, with Commercial and Light Commercial businesses up double-digits. North America Residential HVAC sales increased about mid-single digits.

What is Carrier's (CARR) full-year 2024 financial guidance?

Carrier reaffirmed its full-year 2024 adjusted EPS guidance range of $2.80 - $2.90. The company updated its sales guidance to approximately $25.5 billion, with organic growth expected in the mid-single digits.

How much does Carrier (CARR) plan to repurchase in shares in 2024?

Carrier plans to repurchase about $1 billion worth of shares in the second half of 2024.