Core Insights - Carrier has achieved a significant milestone by having its 'My Learning Center Heat Pump Training' programs recognized by the U.S. Department of Energy (DOE) as an Energy Skilled training provider, emphasizing its commitment to sustainable HVAC solutions [1][2][3] Group 1: Training and Certification - The Energy Skilled designation highlights the quality and rigor of Carrier's training programs, reinforcing its commitment to energy efficiency in the HVAC sector [2] - Carrier's Factory Authorized Dealers require technicians to be NATE-certified, ensuring that many already meet DOE's Energy Skilled standards [2][3] - Carrier is expanding access to Energy Skilled recognition through additional pathways in its training programs, ensuring homeowners can rely on well-trained professionals for energy-efficient upgrades [3] Group 2: Market Position and Strategy - Carrier's recognition as an Energy Skilled provider enhances its legacy of innovation and positions the company at the intersection of energy efficiency, skilled labor, and consumer trust [3] - The company maintains a nationwide network of thousands of Factory Authorized Dealers, which improves visibility and credibility among energy-conscious homeowners [7]

Group 1 - Carrier Global Corporation reported in-line sales with a solid earnings beat, but experienced surprising softness in its residential business due to weak housing market conditions [1] - The commercial business of Carrier Global is performing exceptionally well, particularly in climate control and data center solutions [1] - Jim Cramer expressed confidence in Carrier Global's stock, suggesting it is undervalued and encouraging buying [2] Group 2 - Carrier Global provides climate and energy solutions through its HVAC and refrigeration products and services [2] - There is a belief that certain AI stocks may offer greater upside potential compared to Carrier Global, indicating a competitive investment landscape [2]

Core Insights - Carrier Global Corporation will participate in the Baird 2025 Global Industrial Conference on November 12, 2025, with Chairman & CEO David Gitlin and Senior Vice President & CFO Patrick Goris speaking [1] - The company is recognized as a global leader in intelligent climate and energy solutions, focusing on innovations that enhance comfort, safety, and sustainability [2] Company Overview - Carrier Global Corporation has a long history of innovation, having invented modern air conditioning in 1902, and continues to lead in climate solutions such as temperature control and air quality [2] - The company emphasizes an inclusive workforce that prioritizes customer needs in its operations [2] Financial Updates - Carrier's Board of Directors has approved a $5 billion share repurchase authorization, indicating confidence in the company's financial health and future prospects [5]

Core Insights - The individual has extensive experience in the energy industry, having worked for 22 years in various roles including engineering, planning, and financial analysis [1] - The investment strategy focuses on achieving returns that match the S&P 500 while maintaining lower volatility and higher income [1] - The approach emphasizes long-term holding of investments unless there is a compelling reason to sell, with a focus on intrinsic value [1] Investment Strategy - The individual manages a personal portfolio since 1998, aiming for total return maximization by purchasing assets when prices are low relative to their intrinsic value [1] - There is no specific preference for asset class, market cap, sector, or yield, indicating a broad investment approach [1] Position Disclosure - The individual holds a beneficial long position in the shares of CARR, indicating confidence in the company's future performance [2]

Core Insights - The individual has extensive experience in the energy industry, having worked for 22 years in various roles including engineering, planning, and financial analysis [1] - The investment strategy focuses on achieving returns that match the S&P 500 while maintaining lower volatility and higher income [1] - The approach emphasizes long-term holding of investments unless there is a compelling reason to sell, with a focus on intrinsic value [1] Investment Strategy - The individual manages a personal portfolio since 1998, aiming for total return maximization by purchasing assets when prices are low relative to their intrinsic value [1] - There is no specific preference for asset class, market cap, sector, or yield, indicating a broad investment approach [1] Position Disclosure - The individual holds a beneficial long position in the shares of CARR, indicating confidence in the company's future performance [2]

Core Insights - Carrier Global Corporation reported mixed financial results for Q3 2025, achieving an EPS of $0.67, exceeding the estimated EPS of $0.63, but its revenue of $5.58 billion fell short of the anticipated $5.65 billion [1][6] Financial Performance - The company’s revenue declined by 6.8% compared to the same quarter last year, indicating challenges in the current market environment [2][6] - Despite the revenue shortfall, Carrier outperformed the Zacks Consensus Estimate of $5.53 billion, resulting in a positive surprise of 0.93% [2] - Carrier's EPS of $0.67, while down from $0.83 in the previous year, represented a significant positive surprise of 21.82% against the consensus EPS estimate of $0.55 [3] Shareholder Value - The company returned $3 billion to shareholders year-to-date, including $2.4 billion in share repurchases, demonstrating its commitment to shareholder value [4][6] - The board approved a $5 billion share repurchase authorization, reflecting confidence in the company's strategy and future prospects [4] Financial Metrics - Carrier's financial metrics include a price-to-earnings (P/E) ratio of approximately 12.52 and a debt-to-equity ratio of about 0.83, indicating a moderate level of debt relative to equity [5] - The current ratio of approximately 1.14 suggests the company’s ability to cover short-term liabilities with short-term assets, reinforcing its financial health [5]

Financial Performance - For the three months ended September 30, 2025, net sales were $5.6 billion, a 7% decrease compared to the same period in 2024[132]. - Gross margin for the same period was $1.4 billion, a 14% decrease year-over-year, with a gross margin percentage of 26.0% compared to 28.0% in 2024[134]. - Operating profit decreased to $539 million, down 29% from $763 million in the prior year[132]. - Non-operating income (expense), net was $(106) million, a significant decrease of 1,614% compared to $7 million in 2024[139]. - Adjusted operating profit for the three months ended September 30, 2025, was $823 million, down from $1.0 billion in 2024[143]. - For the nine months ended September 30, 2025, net sales were $16.9 billion, a 2% decrease compared to the same period in 2024[145]. - Gross margin for the same period was $4.7 billion, reflecting a 1% increase year-over-year, with a gross margin percentage of 27.6%[146]. - Adjusted operating profit for the nine months ended September 30, 2025, was $2.8 billion, slightly down from $2.9 billion in 2024[154]. - Non-operating income (expense), net was $278 million, a 5% decrease compared to the prior year, primarily due to reduced interest expense[151]. Tax and Expenses - The effective tax rate for the three months ended September 30, 2025, was a benefit of 0.2%, compared to 22.3% in the same period of 2024[141]. - The effective tax rate for the nine months ended September 30, 2025, was 15.2%, down from 21.4% in 2024, driven by various tax benefits[152]. - Operating expenses were $910 million, flat compared to the same period in 2024, with selling, general and administrative expenses increasing by 1%[135]. - Operating expenses decreased by 6% to $2.6 billion, with selling, general and administrative expenses at $2.3 billion, a 2% decrease from 2024[147]. Segment Performance - Organic sales decreased by 4% year-over-year, primarily due to reduced demand in the Climate Solutions Americas segment[133]. - Climate Solutions Americas segment reported net sales of $2.7 billion for the three months ended September 30, 2025, down from $3.0 billion in 2024[157]. - Segment operating profit for Climate Solutions Americas was $533 million, a 29% decrease year-over-year[160]. - Climate Solutions Europe reported net sales of $1.3 billion, a 4% increase compared to the same period in 2024[161]. - Segment operating profit for Climate Solutions Europe was $120 million, a 7% decrease year-over-year[162]. - Climate Solutions Asia Pacific, Middle East & Africa had net sales of $833 million, a 1% decrease compared to the same period in 2024[163]. - Segment operating profit for Climate Solutions Asia Pacific, Middle East & Africa was $97 million, an 8% decrease year-over-year[164]. - Climate Solutions Transportation reported net sales of $745 million, a 20% decrease compared to the same period in 2024[165]. - Segment operating profit for Climate Solutions Transportation was $115 million, a 16% decrease year-over-year[166]. Cash Flow and Capital Structure - As of September 30, 2025, the company had cash and cash equivalents of $1.4 billion, with approximately 94% held by foreign subsidiaries[179]. - As of September 30, 2025, the company had cash and cash equivalents of $1,423 million, down from $3,969 million on December 31, 2024[182]. - Total debt stood at $11,916 million, with a total equity of $14,839 million, resulting in a total debt to total capitalization ratio of 45%[182]. - The company completed several divestitures in 2024, raising a total of $9.0 billion from the sale of various business units, which were used for debt repayment and growth initiatives[186]. - During the nine months ended September 30, 2025, the company repurchased 36.3 million shares for $2.4 billion, leaving approximately $811 million remaining under the current share repurchase authorization[188]. - Dividends paid during the nine months ended September 30, 2025, totaled $583 million, with a declared dividend of $0.225 per share payable on November 18, 2025[189]. - Net cash flows from continuing operating activities for the nine months ended September 30, 2025, were $1,076 million, a decrease from $1,208 million in the prior year[190]. - Cash used in continuing investing activities was $232 million, significantly lower than $11.3 billion in the same period of 2024, primarily due to a major acquisition in the prior year[192]. - Net cash used in continuing financing activities was $3.9 billion, driven by stock repurchases of $2.4 billion and long-term debt repayments of $1.2 billion[193]. - The company maintains a $2.0 billion USD-denominated facility and a $500 million Euro-denominated facility for general corporate purposes, with $415 million outstanding under the commercial paper program as of September 30, 2025[183]. - Credit ratings from major agencies as of September 30, 2025, include BBB+ from S&P and Baa1 from Moody's, indicating stable and positive outlooks respectively[185]. Strategic Actions - The company acquired the climate solutions business of Viessmann Group, enhancing its portfolio in sustainable building solutions[127]. - The company divested its Commercial Refrigeration business during 2024, part of a broader portfolio transformation strategy[127].

Core Insights - Carrier Global (CARR) reported third-quarter 2025 adjusted earnings of 67 cents per share, exceeding the Zacks Consensus Estimate by 21.82%, but down 19.3% year over year [1][10] - Net sales reached $5.58 billion, surpassing the Zacks Consensus Estimate by 0.93%, yet decreased 6.8% year over year [1][10] - The company announced a $5 billion share buyback and projected 4% EPS growth for 2025 [10][12] Financial Performance - Product sales, accounting for 87.9% of net sales, totaled $4.90 billion, down 7.6% year over year [1] - Service sales, making up 12.1% of net sales, were $673 million, a decline of 0.6% year over year [1] - R&D expenses decreased 12.2% year over year to $151 million, while SG&A expenses increased 0.5% to $803 million [7] - Adjusted operating margin contracted 260 basis points year over year to 14.8% [7] Segment Performance - Climate Solutions Americas revenues were $2.71 billion, contributing 48.6% to net sales, down 8.4% year over year [3] - Climate Solutions Europe revenues increased 3.5% year over year to $1.29 billion, contributing 23.1% to net sales [4] - Climate Solutions Asia Pacific, Middle East & Africa revenues were $833 million, a decline of 1% year over year [5] - Climate Solutions Transportation revenues decreased 20.5% year over year to $745 million [6] Cash Flow and Balance Sheet - The company generated $341 million in cash from operations, down from $649 million in the previous quarter [11] - Free cash flow was $224 million, compared to $568 million in the prior quarter [11] - As of September 30, 2025, cash and cash equivalents were $1.42 billion, down from $1.8 billion as of June 30, 2025 [9] 2025 Outlook - Carrier expects 2025 sales of $22 billion, reflecting flat organic growth [12] - Adjusted operating margin is projected to be between 15% and 15.5%, down 50 basis points from 2024 [12] - Anticipated adjusted earnings are $2.65 per share, indicating a year-over-year growth of 4% [12]

Financial Data and Key Metrics Changes - Reported sales for Q3 were $5.6 billion, with adjusted operating profit at $823 million and adjusted EPS at $0.67, reflecting a year-over-year decline primarily due to lower volumes in the CSA residential business [16][17] - Total company organic growth was down 4%, with adjusted operating profit down 21% and adjusted EPS down 13% [16][17] - Free cash flow was approximately $225 million, impacted by lower operating profit and higher working capital levels due to a sudden reduction in sales [17] Business Line Data and Key Metrics Changes - In the CSA segment, organic sales declined 8%, with residential sales down 30% driven by a 40% decline in volume, while commercial sales were up 30% [17][18] - The CSE segment saw residential and light commercial sales down low single digits, while commercial sales declined mid-single digits [18] - The CSAME segment experienced a 2% decline in organic sales, with strong growth in India and the Middle East offset by weakness in China [18] - The CSD segment reported organic sales up 6%, led by strong growth in container sales [19] Market Data and Key Metrics Changes - Field inventories were down 12% year-over-year at the end of Q3, with expectations to decrease by 30% by year-end [8][14] - In Europe, residential heat pump sales were up about 15%, with Germany seeing a 45% increase [9][10] - The overall backlog for data centers is expected to end the year around $900 million, supporting growth into 2026 [70] Company Strategy and Development Direction - The company is focused on three vectors of growth: products, aftermarket, and systems, with significant progress in each area [5][6] - A new $5 billion share repurchase authorization was approved, reflecting confidence in the company's strategy and execution [5] - The company aims to maintain a balanced portfolio with leading positions in targeted geographies and verticals, while aggressively managing costs [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the residential market, particularly in North America, but expressed confidence in recovery due to strong positions in commercial HVAC and aftermarket businesses [14][15] - The company expects to end 2025 with destocking behind them, although the first half of 2026 may present difficult comparisons [22][23] - Management anticipates a low single-digit organic growth for 2026, with a focus on structural cost reductions and maintaining competitive pricing [23] Other Important Information - The company is taking aggressive cost actions, including the elimination of about 3,000 indirect positions to right-size for demand [5][15] - The company is leveraging AI and other technologies to improve operational efficiency and reduce structural costs [39] Q&A Session Summary Question: Can you unpack the inventory situation and sell-through dynamics? - Management indicated that consolidated inventories are up about $500 million, primarily due to a sudden decline in residential volume and purposeful increases for components replacement [26][28] Question: How does the inventory destocking impact pricing for 2026? - Management expects to announce a mid-single-digit price increase for 2026, with a yield in the low single-digit range [37] Question: What is the outlook for the RLC business in Europe? - Management noted that the German heating market is at historic lows but anticipates a recovery, particularly in heat pump sales [92][93] Question: How is the demand in non-data center verticals? - Non-data center demand in the commercial HVAC business was up in the low teens, while data center orders were significantly higher [50][51] Question: What are the expectations for the data center backlog? - Management confirmed a target of about $1 billion in revenue for the data center segment this year, with a backlog expected to be around $900 million [70][68]

Financial Data and Key Metrics Changes - Reported sales for Q3 were $5.6 billion, with adjusted operating profit at $823 million and adjusted EPS at $0.67, reflecting a year-over-year decline primarily due to lower volumes in the CSA residential business [16][17] - Total company organic growth was down 4%, with adjusted operating profit down 21% and adjusted EPS down 13% [16][17] - Free cash flow was approximately $225 million, impacted by lower operating profit and higher working capital levels due to a sudden reduction in sales [17] Business Line Data and Key Metrics Changes - Organic sales in the CSA segment declined 8%, with residential sales down 30% driven by a 40% decline in volume, while commercial sales increased by 30% [17] - The CSE segment saw residential and light commercial sales down low single digits, while commercial sales declined mid-single digits [18] - The CSAME segment experienced a 2% decline in organic sales, with strong growth in India and the Middle East offset by weakness in China [18] - CSD organic sales were up 6%, led by strong growth in container sales, which increased by 100% [19] Market Data and Key Metrics Changes - In Europe, residential heat pump sales were up about 15%, with Germany seeing a 45% increase [9] - The overall market for heating units in Germany is at 15-year lows, indicating potential for recovery [10] - The company expects field inventory levels to decrease by 30% year-over-year, reaching the lowest levels since 2018 [8] Company Strategy and Development Direction - The company is focused on three vectors of growth: products, aftermarket, and systems, with significant progress reported in each area [5] - A new $5 billion share repurchase authorization was approved, reflecting confidence in the company's strategy and execution [5] - The company aims to maintain a balanced portfolio with leading positions in targeted geographies and verticals, while controlling costs aggressively [14][15] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges in the North American residential market, projecting a $500 million sales challenge and a 20%-25% adjusted EPS headwind [4] - The company expects continued strong performance in commercial HVAC and aftermarket businesses, which together constitute nearly 45% of sales [14] - For 2026, management anticipates a low single-digit organic growth assumption, with a focus on cost actions and maintaining a clean slate in inventory levels [23] Other Important Information - The company is taking aggressive cost actions, including the elimination of about 3,000 indirect positions to right-size for demand [5] - Connectivity and digital differentiation are foundational to the company's strategy, with significant growth in connected chillers and digital platform subscriptions [6] Q&A Session Summary Question: Inventory levels and sell-through dynamics - Management indicated that consolidated inventories are up about $500 million, primarily due to a sudden decline in residential volume and purposeful increases for components replacement [26][28] - They expect inventory levels to start reducing and aim for a clean slate at the beginning of the next year [29][30] Question: Repair versus replace dynamics - Management noted that while parts sales are up, there is a trend of consumers opting for repairs over replacements, although quantifying this is challenging [31] Question: Pricing dynamics for 2026 - Management plans to announce a mid-single digit price increase for 2026, expecting to yield low single-digit results [37] Question: Structural cost reductions - Management confirmed that the focus is on structural cost reductions, not just short-term cuts, with a goal to maintain efficiency and avoid adding back eliminated positions [39] Question: Outlook for CSA residential business - Management expects CSA residential sales to be down high single digits, with a focus on managing inventory levels and anticipating a difficult compare in early 2026 [20][22] Question: Data center backlog and growth - Management confirmed a target of about $1 billion in revenue from the data center segment for the year, with a strong backlog expected to support growth into 2026 [66][70]