Carrier (NYSE: CARR) Q1 2026: orders surge but earnings and cash flow fall
Filing Impact
Filing Sentiment
Form Type
8-K
Rhea-AI Filing Summary
Carrier Global Corporation reported mixed first quarter 2026 results. Net sales were $5.34 billion, up 2% from $5.22 billion, helped by a 3% foreign exchange tailwind while organic sales fell 1%.
Profitability weakened significantly. GAAP operating profit dropped to $259 million from $629 million and operating margin fell to 4.8% from 12.1%. Adjusted operating profit was $594 million versus $848 million, with adjusted operating margin down to 11.1% from 16.3%. GAAP EPS from continuing operations was $0.28 and adjusted EPS was $0.57, down 40% and 12% year-over-year.
Free cash flow was negative $15 million compared with $420 million a year earlier, as operating cash flow declined to $79 million. Segment trends were mixed: Climate Solutions Americas sales fell 3% and margins compressed, while Climate Solutions Europe and Transportation delivered higher sales but lower margins, and Asia Pacific, Middle East & Africa saw modest sales growth but a sharp margin decline.
Orders were a strong point, with data center orders up over 500%, total company orders up 11% and Commercial HVAC orders up 35%, and backlog fully covering expected 2026 data center sales. Carrier returned about $500 million to shareholders through dividends and repurchases and reaffirmed its full-year 2026 outlook for approximately $22 billion of sales, adjusted EPS around $2.80 and free cash flow of about $2 billion.
Positive
- Order strength and backlog: Total company orders rose 11%, Commercial HVAC orders grew 35%, and data center orders increased over 500%, with backlog fully covering expected 2026 data center sales, supporting visibility into future revenue.
- Capital returns and guidance: Carrier returned approximately $500 million to shareholders via dividends and repurchases and reaffirmed full-year 2026 guidance for about $22 billion in sales, ~$3.4 billion adjusted operating profit, ~$2.80 adjusted EPS and ~$2 billion free cash flow.
Negative
- Margin and earnings compression: GAAP operating profit fell 59% to $259 million, adjusted operating profit declined 30% to $594 million, and adjusted EPS decreased 12% to $0.57, with operating margin dropping from 12.1% to 4.8%.
- Cash flow deterioration: Net cash flows from operating activities fell to $79 million from $483 million and free cash flow turned to a negative $15 million compared with $420 million a year earlier, indicating weaker cash generation.
- Segment margin pressure: Climate Solutions Americas, Europe and Asia Pacific, Middle East & Africa all experienced notable operating margin declines, including a 730 basis point drop in Americas and a 490 basis point drop in Asia Pacific, Middle East & Africa.
Insights
Carrier saw solid order growth but significant margin and cash flow pressure in Q1 2026 while keeping full-year guidance.
Carrier Global delivered 2% revenue growth to $5.34 billion, but profitability deteriorated. GAAP operating profit fell 59% to $259 million and GAAP EPS from continuing operations declined 40% to $0.28. Adjusted EPS dropped 12% to $0.57, reflecting lower operating profit across Climate Solutions segments.
Free cash flow swung to a $15 million outflow from a $420 million inflow a year earlier as operating cash flow dropped to $79 million. Segment margins compressed notably, including a 730 basis point decline in Climate Solutions Americas and a 490 basis point decline in Asia Pacific, Middle East & Africa, driven largely by weaker Residential and China RLC demand.
On the positive side, demand indicators were strong: data center orders rose over 500%, total orders increased 11%, and Commercial HVAC orders grew 35%, with backlog fully covering expected 2026 data center sales. Management reaffirmed full-year 2026 guidance for about $22 billion in sales, adjusted operating profit of roughly $3.4 billion, adjusted EPS around $2.80 and free cash flow near $2 billion, noting only a timing shift in the expected closing of the Riello divestiture to the end of Q2 2026.
8-K Event Classification
2 items: 2.02, 9.01
2 items
Item 2.02
Results of Operations and Financial Condition
Financial
Disclosure of earnings results, typically an earnings press release or preliminary financials.
Item 9.01
Financial Statements and Exhibits
Exhibits
Financial statements, pro forma financial information, and exhibit attachments filed with this report.
Key Figures
Net sales: $5.34 billion
GAAP EPS (continuing ops): $0.28
Adjusted EPS (continuing ops): $0.57
+5 more
8 metrics
Net sales
$5.34 billion
Q1 2026, up 2% from $5.22 billion in Q1 2025
GAAP EPS (continuing ops)
$0.28
Q1 2026, down 40% from $0.47 in Q1 2025
Adjusted EPS (continuing ops)
$0.57
Q1 2026, down 12% from $0.65 in Q1 2025
GAAP operating margin
4.8%
Q1 2026, versus 12.1% in Q1 2025
Free cash flow
-$15 million
Q1 2026, versus $420 million in Q1 2025
Total company orders
up 11%
Q1 2026 year-over-year change
Data center orders
up over 500%
Q1 2026 year-over-year change
Full-year 2026 adjusted EPS guidance
~$2.80
Reaffirmed full-year 2026 outlook
Key Terms
organic sales, free cash flow, adjusted EPS, segment operating margin, +2 more
6 terms
organic sales financial
"Organic sales declined 1%, more than offset by a 3% tailwind from foreign currency translation."
Organic sales are the change in a company’s revenue that comes from its existing business operations, excluding effects of acquisitions, divestitures, and currency swings. Think of it like measuring how much a garden grows from the plants you already tended, rather than adding new pots; investors use organic sales to judge whether demand and core business performance are genuinely improving or if growth is driven by one‑time deals or accounting shifts.
free cash flow financial
"Net cash flows from operating activities of $79 million and free cash flow of ($15) million."
Free cash flow is the amount of money a company has left over after paying all its expenses and investing in its business, like buying equipment or updating facilities. It shows how much cash is available to reward shareholders, pay down debt, or save for future growth. This helps investors understand if a company is financially healthy and able to grow.
adjusted EPS financial
"GAAP EPS of $0.28 and adjusted EPS of $0.57."
Adjusted earnings per share (adjusted eps) is a measure of a company's profit per share that has been modified to exclude certain one-time or unusual items, such as costs from restructuring or asset sales. It provides a clearer picture of the company’s core performance by removing events that may distort the usual earnings. Investors use adjusted eps to better understand a company's ongoing profitability and compare it more accurately over time.
segment operating margin financial
"Segment operating margin decreased 730 basis points largely reflecting lower Residential sales and associated factory under-absorption."
Segment operating margin measures how much profit a specific part of a company keeps from its sales after paying the costs to run that part, expressed as a percentage. Investors use it like a slice-size indicator to compare which divisions are more efficient at turning revenue into operating profit, helping spot strengths, weaknesses, and where management might focus resources or improvements.
Riello divestiture financial
"Riello divestiture expected to close by the end of Q2 2026; prior guidance assumed the divestiture closed by the end of Q1 2026."
net debt financial
"Net debt | | $ | 10,787 | | | $ | 10,278 |"
Net debt is the total amount a company owes after subtracting the cash and assets it has that can be used to pay off that debt. It shows how much debt is truly a burden, helping investors understand if a company is financially healthy or heavily borrowed. Think of it like calculating how much money you owe after using your savings to pay part of it.
Earnings Snapshot
Net sales: $5.34 billion · Guidance included
Q1 2026
Net sales
$5.34 billion
2% YoY
GAAP EPS (continuing ops)
$0.28
-40% YoY
Adjusted EPS (continuing ops)
$0.57
-12% YoY
GAAP operating margin
4.8%
down from 12.1%
Free cash flow
-$15 million
down from $420 million
Guidance
For full-year 2026, Carrier guides to approximately $22 billion in sales, about $3.4 billion adjusted operating profit, adjusted EPS around $2.80 and free cash flow of roughly $2 billion.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 30, 2026
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) | (Commission File Number) | (I.R.S. Employer Identification No.) | ||||||||||||
(Address of principal executive offices, including zip code)
(Registrant’s telephone number, including area code)
N/A
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) | |||||
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) | |||||
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) | |||||
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Section 2—Financial Information
Item 2.02. Results of Operations and Financial Condition.
On April 30, 2026, Carrier Global Corporation (the “Company”) issued a press release announcing its first quarter 2026 results.
The press release issued April 30, 2026, is furnished herewith as Exhibit No. 99 to this Report, and shall not be deemed filed for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section and shall not be deemed to be incorporated by reference into any filing by the Company under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act, except as shall be expressly set forth by specific reference in such a filing.
Section 9—Financial Statements and Exhibits
Item 9.01. Financial Statements and Exhibits
(d) Exhibits.
Exhibit Number | Exhibit Description | ||||
| 99 | Press release, dated April 30, 2026, issued by Carrier Global Corporation (Earnings). | ||||
104 | Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. | ||||
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
CARRIER GLOBAL CORPORATION | ||||||||
(Registrant) | ||||||||
Date: April 30, 2026 | By: | /S/ PATRICK GORIS | ||||||
Patrick Goris | ||||||||
| Executive Vice President, Chief Financial & Strategy Officer | ||||||||
Exhibit 99
Carrier Reports First Quarter 2026 Results
•Data center orders up over 500%; backlog fully covers expected 2026 data center sales
•Total company orders1 up 11%; Commercial HVAC1 up 35%
•Net sales up 2%; organic sales down 1%
•GAAP EPS of $0.28 and adjusted EPS of $0.57
•Net cash flows from operating activities of $79 million and free cash flow of ($15) million
•Returned ~$500 million to shareholders through dividends and repurchases
•Reaffirms full year outlook
PALM BEACH GARDENS, Fla., April 30, 2026 – Carrier Global Corporation (NYSE:CARR), global leader in intelligent climate and energy solutions, today reported financial results for the first quarter of 2026.
“We started the year with better than expected sales performance across the portfolio,” said Chairman & CEO David Gitlin. “Orders in our global Commercial HVAC1 business increased 35%, helped by data centers which were up over 500% in the quarter. The strong double-digit sequential increase in Commercial HVAC backlog gives us the confidence to drive our sixth consecutive year of double-digit growth in this business. CSA Light commercial and CSE Residential both delivered growth, while CSA Residential came in better than expected. I am pleased with the team's performance in the first quarter, and we are reaffirming our full-year outlook.”
1 Excludes NORESCO
1
First Quarter 2026 Results
Total Company
| (Unaudited) | |||||||||||
| Three Months Ended March 31 | |||||||||||
| (In millions) | 2026 | 2025 | Change | ||||||||
| Net sales | $ | 5,341 | $ | 5,218 | 2 | % | |||||
| Organic sales | (1) | % | |||||||||
| Operating profit | $ | 259 | $ | 629 | (59) | % | |||||
| Operating margin | 4.8 | % | 12.1 | % | (730) bps | ||||||
| Adjusted operating profit | $ | 594 | $ | 848 | (30) | % | |||||
| Adjusted operating margin | 11.1 | % | 16.3 | % | (520) bps | ||||||
| Diluted earnings per share: | |||||||||||
| Continuing operations | $ | 0.28 | $ | 0.47 | (40) | % | |||||
| Continuing operations - Adjusted | $ | 0.57 | $ | 0.65 | (12) | % | |||||
Carrier’s first-quarter sales of $5.3 billion increased 2% compared to the prior year. Organic sales declined 1%, more than offset by a 3% tailwind from foreign currency translation.
GAAP operating profit of $259 million in the quarter declined 59% from last year, driven by the CSA, CSE and CSAME segments.
Adjusted operating profit of $594 million was down 30% from last year, predominantly due to lower sales in our CSA Residential business and continued headwinds in China Residential and Light Commercial (RLC).
Adjusted operating profit of $594 million was down 30% from last year, predominantly due to lower sales in our CSA Residential business and continued headwinds in China Residential and Light Commercial (RLC).
Net earnings from continuing operations were $239 million and adjusted net earnings from continuing operations were $482 million. GAAP EPS from continuing operations was $0.28 and adjusted EPS was $0.57, down 40% and 12% year-over-year, respectively. The declines were primarily driven by lower operating profit, partially offset by a lower tax rate and benefits of a lower share count.
2
Climate Solutions Americas (CSA)
| (Unaudited) | |||||||||||
| Three Months Ended March 31 | |||||||||||
| (In millions) | 2026 | 2025 | Change | ||||||||
| Net sales | $ | 2,501 | $ | 2,572 | (3) | % | |||||
| Organic sales | (3) | % | |||||||||
| Segment operating profit | $ | 373 | $ | 570 | (35) | % | |||||
| Segment operating margin | 14.9 | % | 22.2 | % | (730) bps | ||||||
CSA segment sales declined 3%. Organic sales were down 3% driven by Residential, down about 12%, partially offset by strength in Light commercial and Commercial1, up 9% and 1% respectively.
Segment operating margin decreased 730 basis points largely reflecting lower Residential sales and associated factory under-absorption.
Climate Solutions Europe (CSE)
| (Unaudited) | |||||||||||
| Three Months Ended March 31 | |||||||||||
| (In millions) | 2026 | 2025 | Change | ||||||||
| Net sales | $ | 1,293 | $ | 1,169 | 11 | % | |||||
| Organic sales | — | % | |||||||||
| Segment operating profit | $ | 89 | $ | 105 | (15) | % | |||||
| Segment operating margin | 6.9 | % | 9.0 | % | (210) bps | ||||||
CSE segment sales increased 11%. Organic sales were flat with RLC up low-single digits and Commercial down mid-single digits.
Segment operating margin decreased 210 basis points driven by lower Commercial volume and higher promotions partially offset by RLC volume growth and strong productivity.
1 Excludes NORESCO
3
Climate Solutions Asia Pacific, Middle East & Africa (CSAME)
| (Unaudited) | |||||||||||
| Three Months Ended March 31 | |||||||||||
| (In millions) | 2026 | 2025 | Change | ||||||||
| Net sales | $ | 834 | $ | 826 | 1 | % | |||||
| Organic sales | (1) | % | |||||||||
| Segment operating profit | $ | 81 | $ | 121 | (33) | % | |||||
| Segment operating margin | 9.7 | % | 14.6 | % | (490) bps | ||||||
CSAME segment sales increased 1%. Organic sales were down 1% mainly driven by RLC in China, partially offset by strong Commercial growth outside of China, particularly in India and Australia.
Segment operating margin decreased 490 basis points as expected, driven mainly by China RLC.
Climate Solutions Transportation (CST)
| (Unaudited) | |||||||||||
| Three Months Ended March 31 | |||||||||||
| (In millions) | 2026 | 2025 | Change | ||||||||
| Net sales | $ | 713 | $ | 651 | 10 | % | |||||
| Organic sales | 5 | % | |||||||||
| Segment operating profit | $ | 101 | $ | 97 | 4 | % | |||||
| Segment operating margin | 14.2 | % | 14.9 | % | (70) bps | ||||||
CST sales increased 10% driven by strong growth in Container. Organic sales increased 5% with 38% growth in Container, partially offset by a decline in Global Truck and Trailer, down high-single digits.
Segment operating margin declined 70 basis points, due to unfavorable mix.
4
Cash Flow
| (Unaudited) | ||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Net cash flows provided by operating activities | $ | 79 | $ | 483 | ||||||||||
| Less: Capital expenditures | (94) | (63) | ||||||||||||
| Free cash flow | $ | (15) | $ | 420 | ||||||||||
Net cash flows generated from operating activities were $79 million and capital expenditures were $94 million, resulting in free cash flow of ($15) million.
5
Full-Year 2026 Guidance**
| Current Guidance** | Prior Guidance | |||||||
Sales | ~$22 billion ~$250 million revenue headwind from Riello exit Organic* flat to up LSD FX 1% Net, Acquisitions / Divestitures (1%) | ~$22 billion ~$350 million revenue headwind from Riello exit Organic* flat to up LSD FX 1% Net, Acquisitions / Divestitures (1%) | ||||||
Adjusted Operating Profit* | ~$3.4 billion | ~$3.4 billion | ||||||
| Adjusted EPS* | ~$2.80 | ~$2.80 | ||||||
Free Cash Flow* | ~$2 billion | ~$2 billion | ||||||
Riello divestiture expected to close by the end of Q2 2026; prior guidance assumed the divestiture closed by the
end of Q1 2026.
end of Q1 2026.
*Note: When the company provides expectations for organic sales, adjusted operating profit, adjusted operating profit, 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 April 30, 2026
Conference Call
Carrier will host a webcast of its earnings conference call today, Thursday, April 30, 2026, 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. For alternative dial-in information, please contact Carrier investor relations at InvestorRelations@Carrier.com.
6
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. From time to time, oral or written forward-looking statements may also be included in other information released to the public. These forward-looking statements are intended to provide management’s current expectations or plans for our 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, expectations relating to our sales backlog, share repurchases, tax rates and other measures of financial performance or potential future plans, strategies or transactions of Carrier, market conditions including with respect to residential end-markets, data center and otherwise, growth prospects for 2026 and beyond, expectations concerning the mitigation and net impact of tariffs during 2026, Carrier's guidance for full-year 2026, Carrier's plans with respect to our 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 those statements, we claim the protection of the safe harbor for forward-looking statements contained in the U.S. Private Securities Litigation Reform Act of 1995. Such risks, uncertainties and other factors include, without limitation, those described below and under the section titled “Risk Factors” in our most recent Annual Report on Form 10-K and in subsequent reports that we file with the SEC: the effect of economic conditions in the industries and markets in which Carrier and our businesses operate in the U.S. and globally and any changes therein, including financial market conditions, inflationary cost pressures, fluctuations in commodity prices, interest rates and foreign currency exchange rates, levels of end market demand in construction, the impact of weather conditions, pandemic health issues, natural disasters and the financial condition of our customers and suppliers; challenges in the development, production, delivery, support, performance and realization of the anticipated benefits of advanced technologies and new products and services; future levels of capital spending and research and development spending; future availability of credit and factors that may affect such availability, including credit market conditions and Carrier's capital structure and credit ratings; the timing and scope of future repurchases of Carrier's common stock, including market conditions and the level of other investing activities and uses of cash; delays and disruption in the delivery of materials and services from suppliers; cost reduction efforts and restructuring costs and savings and other consequences thereof; new business and investment opportunities; the outcome of legal proceedings, investigations and other contingencies; the impact of pension plan assumptions on future cash contributions and earnings; the impact of the negotiation of collective bargaining agreements and labor disputes; the effect of changes in political conditions in the U.S. and other countries in which Carrier and our businesses operate, including the effect of ongoing uncertainty and/or changes in U.S. trade policies, on general market conditions, global trade policies, the imposition of tariffs, and
7
currency exchange rates in the near term and beyond; the effect of changes in tax, environmental, regulatory (including among other things import/export) and other laws and regulations in the U.S. and other countries in which we and our businesses operate; the ability of Carrier to retain and hire key personnel; the scope, nature, impact or timing of acquisition and divestiture activity, such as our portfolio transformation transactions, including among other things integration of acquired businesses into existing businesses and realization of synergies and opportunities for growth and innovation and incurrence of related costs; a determination by the IRS and other tax authorities that the distribution of Carrier from RTX Corporation (f/k/a United Technologies Corporation) or certain related transactions should be treated as taxable transactions; and risks associated with current and future indebtedness, as well as our ability to reduce indebtedness and the timing thereof. The forward-looking statements speak only as of the date of this communication. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information as to factors that may cause actual results to differ materially from those expressed or implied in the forward-looking statements is disclosed from time to time in our other filings with the SEC.
About Carrier
Carrier Global Corporation, global leader in intelligent climate and energy solutions, is committed to creating innovations that bring comfort, safety and sustainability to life. Through cutting-edge advancements in climate solutions such as temperature control, air quality and transportation, we improve lives, empower critical industries and ensure the safe transport of food, life-saving medicines and more. Since inventing modern air conditioning in 1902, we lead with purpose: enhancing the lives we live and the world we share. We continue to lead because of our world-class, inclusive workforce that puts the customer at the center of everything we do. For more information, visit www.carrier.com or follow Carrier on social media at @Carrier.
Contact:
Investor Relations
Michael Rednor
561-365-2020
InvestorRelations@Carrier.com
Media Inquiries
Rob Six
561-365-2020
Robert.Six@Carrier.com
8
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 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, adjusted earnings per share (“EPS”), adjusted effective tax rate and net debt are non-GAAP financial measures and are associated with Carrier's continuing operations unless specifically noted.
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 consolidated operating profit (a GAAP measure), excluding restructuring costs, amortization of acquired intangible assets and other significant items. Adjusted operating margin represents adjusted operating profit as a percentage of consolidated net sales (a GAAP measure). Adjusted EPS represents diluted earnings per share (a GAAP measure), excluding restructuring costs, amortization of acquired intangible assets and other significant items. The adjusted effective tax rate represents the effective tax rate (a GAAP measure), excluding restructuring costs, amortization of acquired intangible assets and other significant items. Net debt represents long-term debt (a GAAP measure) less cash and cash equivalents (a GAAP measure).
Segment operating profit is the measure of profit and loss that the Chief Operating Decision Maker uses to evaluate segment profitability. Segment operating profit represents operating profit (a GAAP measure) adjusted to exclude restructuring costs, amortization of acquired intangible assets and other significant items of a nonoperational nature.
Free cash flow is a non-GAAP financial measure that represents net cash flows provided by continuing 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 Carrier provides our expectations for organic sales, adjusted operating profit (including on a segment basis), adjusted operating margin (including on a segment basis), adjusted effective tax rate, adjusted EPS, free cash flow, and interest expense, net 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 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.
9
Carrier Global Corporation
Condensed Consolidated Statement of Operations
| (Unaudited) | ||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| (In millions, except per share amounts) | 2026 | 2025 | ||||||||||||
| Net sales | ||||||||||||||
| Product sales | $ | 4,667 | $ | 4,652 | ||||||||||
| Service sales | 674 | 566 | ||||||||||||
| Total Net sales | 5,341 | 5,218 | ||||||||||||
| Costs and expenses | ||||||||||||||
| Cost of products sold | (3,591) | (3,358) | ||||||||||||
| Cost of services sold | (506) | (415) | ||||||||||||
| Research and development | (143) | (153) | ||||||||||||
| Selling, general and administrative | (861) | (729) | ||||||||||||
| Total Costs and expenses | (5,101) | (4,655) | ||||||||||||
| Equity method investment net earnings | 31 | 44 | ||||||||||||
| Other income (expense), net | (12) | 22 | ||||||||||||
| Operating profit | 259 | 629 | ||||||||||||
| Non-service pension benefit (expense) | 1 | 1 | ||||||||||||
| Interest (expense) income, net | (90) | (82) | ||||||||||||
| Earnings before income taxes | 170 | 548 | ||||||||||||
| Income tax (expense) benefit | 96 | (111) | ||||||||||||
| Earnings from continuing operations | 266 | 437 | ||||||||||||
| Discontinued operations, net of tax | (1) | — | ||||||||||||
| Net earnings (loss) | 265 | 437 | ||||||||||||
| Less: Non-controlling interest in subsidiaries' | 27 | 25 | ||||||||||||
| Net earnings (loss) attributable to common shareowners | $ | 238 | $ | 412 | ||||||||||
| Amounts attributable to common shareowners: | ||||||||||||||
| Continuing operations | $ | 239 | $ | 412 | ||||||||||
| Discontinued operations | (1) | — | ||||||||||||
| Net earnings (loss) attributable to common shareowners | $ | 238 | $ | 412 | ||||||||||
| Earnings per share | ||||||||||||||
| Basic: | ||||||||||||||
| Continuing operations | $ | 0.29 | $ | 0.47 | ||||||||||
| Discontinued operations | — | — | ||||||||||||
| Net earnings (loss) | $ | 0.29 | $ | 0.47 | ||||||||||
| Diluted: | ||||||||||||||
| Continuing operations | $ | 0.28 | $ | 0.47 | ||||||||||
| Discontinued operations | — | — | ||||||||||||
| Net earnings (loss) | $ | 0.28 | $ | 0.47 | ||||||||||
| Weighted-average number of shares outstanding | ||||||||||||||
| Basic | 835.0 | 866.9 | ||||||||||||
| Diluted | 842.8 | 878.3 | ||||||||||||
10
Carrier Global Corporation
Condensed Consolidated Balance Sheet
| (Unaudited) | ||||||||||||||
| (In millions) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Assets | ||||||||||||||
| Cash and cash equivalents | $ | 1,371 | $ | 1,555 | ||||||||||
| Accounts receivable, net | 3,130 | 2,639 | ||||||||||||
| Inventories, net | 2,581 | 2,483 | ||||||||||||
| Assets held for sale | 621 | 592 | ||||||||||||
| Other current assets | 1,315 | 1,264 | ||||||||||||
| Total current assets | 9,018 | 8,533 | ||||||||||||
| Future income tax benefits | 1,137 | 1,074 | ||||||||||||
| Fixed assets, net | 3,122 | 3,165 | ||||||||||||
| Operating lease right-of-use assets | 551 | 546 | ||||||||||||
| Intangible assets, net | 5,987 | 6,326 | ||||||||||||
| Goodwill | 15,313 | 15,501 | ||||||||||||
| Pension and post-retirement assets | 58 | 56 | ||||||||||||
| Equity method investments | 1,331 | 1,321 | ||||||||||||
| Other assets | 669 | 668 | ||||||||||||
| Total Assets | $ | 37,186 | $ | 37,190 | ||||||||||
| Liabilities and Equity | ||||||||||||||
| Accounts payable | $ | 2,979 | $ | 2,702 | ||||||||||
| Accrued liabilities | 3,700 | 3,774 | ||||||||||||
| Liabilities held for sale | 170 | 170 | ||||||||||||
| Short-term borrowings and current portion of long-term debt | 1,736 | 468 | ||||||||||||
| Total current liabilities | 8,585 | 7,114 | ||||||||||||
| Long-term debt | 10,422 | 11,365 | ||||||||||||
| Future pension and post-retirement obligations | 188 | 192 | ||||||||||||
| Future income tax obligations | 1,688 | 1,833 | ||||||||||||
| Operating lease liabilities | 415 | 418 | ||||||||||||
| Other long-term liabilities | 2,087 | 2,140 | ||||||||||||
| Total Liabilities | 23,385 | 23,062 | ||||||||||||
| Equity | ||||||||||||||
| Common stock | 10 | 10 | ||||||||||||
| Treasury stock | (7,104) | (6,795) | ||||||||||||
| Additional paid-in capital | 8,675 | 8,665 | ||||||||||||
| Retained earnings | 12,431 | 12,193 | ||||||||||||
| Accumulated other comprehensive income (loss) | (560) | (269) | ||||||||||||
| Non-controlling interest | 349 | 324 | ||||||||||||
| Total Equity | 13,801 | 14,128 | ||||||||||||
| Total Liabilities and Equity | $ | 37,186 | $ | 37,190 | ||||||||||
11
Carrier Global Corporation
Condensed Consolidated Statement of Cash Flows
(Unaudited)
| Three Months Ended March 31, | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Operating Activities | ||||||||||||||
| Net earnings (loss) | $ | 265 | $ | 437 | ||||||||||
| Discontinued operations, net of tax | 1 | — | ||||||||||||
| Adjustments for non-cash items, net: | ||||||||||||||
| Depreciation and amortization | 315 | 303 | ||||||||||||
| Deferred income tax provision | (179) | (69) | ||||||||||||
| Stock-based compensation costs | 21 | 23 | ||||||||||||
| Equity method investment net earnings | (31) | (44) | ||||||||||||
| (Gain) loss on sale of investments | (3) | (5) | ||||||||||||
| Changes in operating assets and liabilities | ||||||||||||||
| Accounts receivable, net | (509) | (362) | ||||||||||||
| Inventories, net | (138) | (301) | ||||||||||||
| Accounts payable and accrued liabilities | 351 | 481 | ||||||||||||
| Distributions from equity method investments | 12 | 77 | ||||||||||||
| Other operating activities, net | (39) | (52) | ||||||||||||
| Net cash flows provided by (used in) continuing operating activities | 66 | 488 | ||||||||||||
| Net cash flows provided by (used in) discontinued operating activities | 13 | (5) | ||||||||||||
| Net cash flows provided by (used in) operating activities | 79 | 483 | ||||||||||||
| Investing Activities | ||||||||||||||
| Capital expenditures | (94) | (63) | ||||||||||||
| Investment in businesses, net of cash acquired | (23) | (12) | ||||||||||||
| Dispositions of businesses | 8 | 8 | ||||||||||||
| Settlement of derivative contracts, net | 35 | 36 | ||||||||||||
| Other investing activities, net | 9 | 1 | ||||||||||||
| Net cash flows provided by (used in) continuing investing activities | (65) | (30) | ||||||||||||
| Net cash flows provided by (used in) discontinued investing activities | — | 7 | ||||||||||||
| Net cash flows provided by (used in) investing activities | (65) | (23) | ||||||||||||
| Financing Activities | ||||||||||||||
| Increase (decrease) in short-term borrowings, net | 371 | (49) | ||||||||||||
| Issuance of long-term debt | 22 | 9 | ||||||||||||
| Repayment of long-term debt | (16) | (1,205) | ||||||||||||
| Repurchases of common stock | (306) | (1,288) | ||||||||||||
| Dividends paid on common stock | (201) | (198) | ||||||||||||
| Dividends paid to non-controlling interest | (1) | — | ||||||||||||
| Other financing activities, net | (10) | (16) | ||||||||||||
| Net cash flows provided by (used in) continuing financing activities | (141) | (2,747) | ||||||||||||
| Net cash flows provided by (used in) discontinued financing activities | — | — | ||||||||||||
| Net cash flows provided by (used in) financing activities | (141) | (2,747) | ||||||||||||
| Effect of foreign exchange rate changes on cash and cash equivalents | (13) | 17 | ||||||||||||
| Net increase (decrease) in cash and cash equivalents and restricted cash, including cash classified in current assets held for sale | (140) | (2,270) | ||||||||||||
| Less: Change in cash balances classified as assets held for sale | 43 | — | ||||||||||||
| Net increase (decrease) in cash and cash equivalents and restricted cash | (183) | (2,270) | ||||||||||||
| Cash, cash equivalents and restricted cash, beginning of period | 1,557 | 3,972 | ||||||||||||
| Cash, cash equivalents and restricted cash, end of period | 1,374 | 1,702 | ||||||||||||
| Less: restricted cash | 3 | 4 | ||||||||||||
| Cash and cash equivalents, end of period | $ | 1,371 | $ | 1,698 | ||||||||||
12
Carrier Global Corporation
Segment Summary
| (Unaudited) | ||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Segment net sales | ||||||||||||||
| Climate Solutions Americas | $ | 2,501 | $ | 2,572 | ||||||||||
| Climate Solutions Europe | 1,293 | 1,169 | ||||||||||||
| Climate Solutions Asia Pacific, Middle East & Africa | 834 | 826 | ||||||||||||
| Climate Solutions Transportation | 713 | 651 | ||||||||||||
| Segment net sales | $ | 5,341 | $ | 5,218 | ||||||||||
| Segment operating profit | ||||||||||||||
| Climate Solutions Americas | $ | 373 | $ | 570 | ||||||||||
| Climate Solutions Europe | 89 | 105 | ||||||||||||
| Climate Solutions Asia Pacific, Middle East & Africa | 81 | 121 | ||||||||||||
| Climate Solutions Transportation | 101 | 97 | ||||||||||||
| Segment operating profit | $ | 644 | $ | 893 | ||||||||||
| Segment operating margin | ||||||||||||||
| Climate Solutions Americas | 14.9 | % | 22.2 | % | ||||||||||
| Climate Solutions Europe | 6.9 | % | 9.0 | % | ||||||||||
| Climate Solutions Asia Pacific, Middle East & Africa | 9.7 | % | 14.6 | % | ||||||||||
| Climate Solutions Transportation | 14.2 | % | 14.9 | % | ||||||||||
13
Components of Changes in Net Sales
Three Months Ended March 31, 2026 Compared with Three Months Ended March 31, 2025 | |||||||||||||||||||||||||||||
| (Unaudited) | |||||||||||||||||||||||||||||
| Factors Contributing to Total % change in Net Sales | |||||||||||||||||||||||||||||
| Organic | FX Translation | Acquisitions / Divestitures, net | Other | Total | |||||||||||||||||||||||||
| Climate Solutions Americas | (3) | % | — | % | — | % | — | % | (3) | % | |||||||||||||||||||
| Climate Solutions Europe | — | % | 11 | % | — | % | — | % | 11 | % | |||||||||||||||||||
| Climate Solutions Asia Pacific, Middle East & Africa | (1) | % | 2 | % | — | % | — | % | 1 | % | |||||||||||||||||||
| Climate Solutions Transportation | 5 | % | 5 | % | — | % | — | % | 10 | % | |||||||||||||||||||
| Consolidated | (1) | % | 3 | % | — | % | — | % | 2 | % | |||||||||||||||||||
14
Carrier Global Corporation
Reconciliations
| (Unaudited) | ||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Reconciliation to Earnings before income taxes | ||||||||||||||
| Segment operating profit | $ | 644 | $ | 893 | ||||||||||
| Corporate and other | (50) | (45) | ||||||||||||
| Restructuring costs | (108) | (8) | ||||||||||||
| Amortization of acquired intangible assets | (213) | (201) | ||||||||||||
| Acquisition/divestiture-related costs | (14) | (10) | ||||||||||||
| Non-service pension (expense) benefit | 1 | 1 | ||||||||||||
| Interest (expense) income, net | (90) | (82) | ||||||||||||
| Earnings before income taxes | $ | 170 | $ | 548 | ||||||||||
| (Unaudited) | ||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Reconciliation of Segment operating profit to Adjusted operating profit | ||||||||||||||
| Climate Solutions Americas | $ | 373 | $ | 570 | ||||||||||
| Climate Solutions Europe | 89 | 105 | ||||||||||||
| Climate Solutions Asia Pacific, Middle East & Africa | 81 | 121 | ||||||||||||
| Climate Solutions Transportation | 101 | 97 | ||||||||||||
| Segment operating profit | $ | 644 | $ | 893 | ||||||||||
| Corporate and other | (50) | (45) | ||||||||||||
| Adjusted operating profit | $ | 594 | $ | 848 | ||||||||||
15
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 March 31, 2026 | |||||||||||||||||
| (In millions, except per share amounts) | Reported | Adjustments | Adjusted | ||||||||||||||
| Net sales | $ | 5,341 | $ | — | $ | 5,341 | |||||||||||
| Operating profit | $ | 259 | 335 | a | $ | 594 | |||||||||||
| Operating margin | 4.8 | % | 11.1 | % | |||||||||||||
| Earnings before income taxes | $ | 170 | 335 | a | $ | 505 | |||||||||||
| Income tax (expense) benefit | $ | 96 | (92) | b | $ | 4 | |||||||||||
| Effective tax rate | (56.5) | % | (0.8) | % | |||||||||||||
| Earnings from continuing operations attributable to common shareowners | $ | 239 | $ | 243 | $ | 482 | |||||||||||
| Summary of Adjustments: | |||||||||||||||||
| Restructuring costs | $ | 108 | a | ||||||||||||||
| Amortization of acquired intangible assets | 213 | a | |||||||||||||||
| Acquisition/divestiture-related costs | 14 | a | |||||||||||||||
| Total adjustments | $ | 335 | |||||||||||||||
| Tax effect on adjustments above | $ | (92) | |||||||||||||||
| Total tax adjustments | $ | (92) | b | ||||||||||||||
| Diluted shares outstanding | 842.8 | 842.8 | |||||||||||||||
| Diluted earnings per share: | |||||||||||||||||
| Continuing operations | $ | 0.28 | $ | 0.57 | |||||||||||||
16
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 March 31, 2025 | |||||||||||||||||
| (In millions, except per share amounts) | Reported | Adjustments | Adjusted | ||||||||||||||
| Net sales | $ | 5,218 | $ | — | $ | 5,218 | |||||||||||
| Operating profit | $ | 629 | 219 | a | $ | 848 | |||||||||||
| Operating margin | 12.1 | % | 16.3 | % | |||||||||||||
| Earnings before income taxes | $ | 548 | 219 | a | $ | 767 | |||||||||||
| Income tax (expense) benefit | $ | (111) | (58) | b | $ | (169) | |||||||||||
| Effective tax rate | 20.3 | % | 22.0 | % | |||||||||||||
| Earnings from continuing operations attributable to common shareowners | $ | 412 | $ | 161 | $ | 573 | |||||||||||
| Summary of Adjustments: | |||||||||||||||||
| Restructuring costs | $ | 8 | a | ||||||||||||||
| Amortization of acquired intangible assets | 201 | a | |||||||||||||||
| Acquisition/divestiture-related costs | 10 | a | |||||||||||||||
| Total adjustments | $ | 219 | |||||||||||||||
| Tax effect on adjustments above | $ | (58) | |||||||||||||||
| Total tax adjustments | $ | (58) | b | ||||||||||||||
| Diluted shares outstanding | 878.3 | 878.3 | |||||||||||||||
| Diluted earnings per share: | |||||||||||||||||
| Continuing operations | $ | 0.47 | $ | 0.65 | |||||||||||||
17
Free Cash Flow Reconciliation
| (Unaudited) | ||||||||||||||
| Three Months Ended March 31, | ||||||||||||||
| (In millions) | 2026 | 2025 | ||||||||||||
| Net cash flows provided by operating activities | $ | 79 | $ | 483 | ||||||||||
| Less: Capital expenditures | (94) | (63) | ||||||||||||
| Free cash flow | $ | (15) | $ | 420 | ||||||||||
Net Debt Reconciliation
| (Unaudited) | ||||||||||||||
| (In millions) | March 31, 2026 | December 31, 2025 | ||||||||||||
| Long-term debt | $ | 10,422 | $ | 11,365 | ||||||||||
| Short-term borrowings and current portion of long-term debt | 1,736 | 468 | ||||||||||||
| Less: Cash and cash equivalents | 1,371 | 1,555 | ||||||||||||
| Net debt | $ | 10,787 | $ | 10,278 | ||||||||||
18
FAQ
How did Carrier (CARR) perform in Q1 2026 versus last year?
Carrier’s Q1 2026 net sales were $5.34 billion, up 2% from $5.22 billion. However, GAAP operating profit dropped 59% to $259 million and GAAP EPS from continuing operations fell to $0.28 from $0.47, reflecting significant margin pressure across several segments.
What were Carrier (CARR) Q1 2026 adjusted earnings and margins?
Adjusted operating profit in Q1 2026 was $594 million, down from $848 million in 2025. Adjusted operating margin declined to 11.1% from 16.3%. Adjusted EPS from continuing operations was $0.57, a 12% year-over-year decrease from $0.65, mainly due to lower operating profit.
How strong were Carrier’s orders and backlog in Q1 2026?
Carrier reported robust demand, with total company orders up 11% and Commercial HVAC orders up 35%. Data center orders increased over 500%, and management stated that backlog fully covers expected 2026 data center sales, supporting near-term growth prospects in that segment.
What was Carrier’s Q1 2026 cash flow and free cash flow performance?
Net cash flows from operating activities were $79 million in Q1 2026, down sharply from $483 million a year earlier. After $94 million of capital expenditures, free cash flow was negative $15 million, compared with positive free cash flow of $420 million in the prior-year quarter.
Did Carrier (CARR) change its full-year 2026 financial guidance?
Carrier reaffirmed its full-year 2026 outlook, guiding to approximately $22 billion in sales, about $3.4 billion of adjusted operating profit, adjusted EPS around $2.80 and free cash flow near $2 billion. The company only updated timing for the Riello divestiture to close by end of Q2 2026.
How did Carrier’s main segments perform in Q1 2026?
Climate Solutions Americas sales declined 3% with a 730 basis point margin drop. Climate Solutions Europe sales grew 11% but margins fell 210 basis points. Asia Pacific, Middle East & Africa sales rose 1% with a 490 basis point margin decline, while Transportation sales increased 10% with modest margin compression.
What is Carrier’s net debt position as of March 31, 2026?
As of March 31, 2026, Carrier reported long-term debt of $10.42 billion and short-term borrowings and current portion of long-term debt of $1.74 billion. With cash and cash equivalents of $1.37 billion, net debt was approximately $10.79 billion, slightly above year-end 2025 levels.