Carrier Global CARR reported third-quarter 2024 adjusted earnings of 77 cents per share, which missed the Zacks Consensus Estimate by 4.94%. The figure increased 3% year over year.
Net sales of $5.98 billion missed the Zacks Consensus Estimate by 9.50% but increased 21.3% year over year.
The year-over-year surge was driven by the acquisition of Viessmann Climate Solutions, which contributed approximately 17% to overall sales growth. This acquisition helped enhance Carrier’s product offerings and market reach.
Product sales (88.7% of net sales) of $5.3 billion increased 22.2% year over year. Service sales (11.3% of net sales) of $677 million were up 14.6% year over year.
Carrier Global Corporation Price, Consensus and EPS Surprise
Carrier Global Corporation price-consensus-eps-surprise-chart | Carrier Global Corporation Quote
CARR’s shares have soared 39.1% compared with the Zacks Computer and Technology sector’s rise of 25.3% year to date. The outperformance can be attributed to CARR’s strength in the HVAC Segment.
However, CARR is realigning its business and has adjusted its full-year guidance due to the move of the Fire & Security segment to discontinued operations.
As a result, its revenue fell short of estimates, and the company has also lowered its guidance for 2024. These factors may put downward pressure on Carrier’s shares.
CARR’s Quarter in Details
HVAC revenues of $5.05 billion contributed 84.5% to net sales and increased 26.2% year over year.
Refrigeration revenues of $938 million were up 1.5% year over year and contributed 15.7% to net sales.
Research & development (R&D) expenses increased 36.5% year over year to $172 million. As a percentage of revenues, R&D expenses expanded 30 basis points (bps) year over year.
Selling, general & administrative (SG&A) expenses rose 20.3% year over year to $799 million. As a percentage of revenues, SG&A expenses decreased 100 bps year over year.
Adjusted operating margin contracted 40 bps on a year-over-year basis to 17.4%.
Adjusted operating margin in the HVAC segment contracted 100 bps year over year to 19.8%.
The Refrigeration segment reported an adjusted operating margin of 12.5%, which expanded 50 bps year over year.
CARR’s Balance Sheet
As of Sept. 30, 2024, Carrier had cash and cash equivalents of $2.22 billion compared with $2.91 billion as of June 30.
Total debt (including the current portion) as of Sept. 30, 2024, was $12.43 billion compared with $13.32 billion as of June 30.
In the reported quarter, Carrier generated $431 million in cash from operations, down from $700 million in the prior quarter.
Capital expenditure was $312 million in the third quarter of 2024. Free cash flow was $119 million in the reported quarter.
Carrier Lowers 2024 Outlook
For 2024, Carrier expects to achieve sales exceeding $22.5 billion and an adjusted operating margin of 15.5%. The company anticipates adjusted earnings of $2.50 per share and a free cash outflow of approximately $0.2 billion.
Previously, Carrier had forecasted 2024 sales of over $25.5 billion, with an adjusted operating margin of 15.5%. It anticipated adjusted earnings between $2.80 and $2.90 per share and an expected free cash flow of approximately $0.4 billion.
CARR’s Zacks Rank & Other Stocks to Consider
Carrier currently carries a Zacks Rank #2 (Buy).
Reddit RDDT, Garmin GRMN and Cadence Design Systems CDNS are some top-ranked stocks that investors can consider in the broader sector. Each stock currently carries Zacks Rank 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Reddit shares have gained 54% year to date. RDDT is set to report its third-quarter 2024 results on Oct. 29.
Garmin shares have gained 25.7% year to date. GRMN is set to report its third-quarter 2024 results on Oct. 30.
Cadence Design Systems shares have lost 8.5% year to date. CDNS is set to report its third-quarter 2024 results on Oct 28.
5 Stocks Set to Double
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Carrier Global Corporation (CARR) : Free Stock Analysis Report
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