Financial Data and Key Metrics Changes - Reported sales for Q3 2025 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 [16] Business Line Data and Key Metrics Changes - Organic sales in the CSA segment declined 8%, with residential sales down 30% due to a 40% decline in volume, while commercial sales increased by 30% [17] - CSE segment saw residential and light commercial sales down low single digits, while commercial declined mid-single digits [18] - CSAME segment organic sales declined 2%, with strong growth in India and the Middle East offset by weakness in China [18] - CSD segment organic sales were up 6%, led by strong growth in container sales [19] Market Data and Key Metrics Changes - In Europe, residential heat pump sales were up about 15%, with Germany seeing a 45% increase [9][10] - The overall market for heating units in Germany is at 15-year lows, indicating potential for recovery [10][11] - Commercial HVAC business in CSA has shown best-in-class performance, with expectations for continued growth driven by data centers [12][13] 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 [4][5] - A new $5 billion share repurchase authorization was approved, reflecting confidence in the company's strategy and execution [4] - The company aims to reduce overhead by eliminating about 3,000 indirect positions and is taking aggressive cost actions to right-size for demand [4][14] 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% to 25% adjusted EPS headwind [3] - The company expects to end 2025 with CSA residential destocking behind it, anticipating a difficult comparison in the first half of 2026 [23][24] - Management remains optimistic about the recovery of the CSA residential business and expects continued strong performance in commercial HVAC and aftermarket segments [13][24] Other Important Information - The company is implementing significant cost actions expected to yield over $100 million in carryover savings for 2026 [21] - Adjusted EPS for the full year is projected to be about $2.65, with free cash flow expected to be around $2 billion [22] 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][27] - They expect inventory levels to start reducing and aim for a 30% year-over-year decrease by year-end [29] Question: Pricing dynamics for 2026 - Management plans to announce a mid-single digit price increase for 2026, expecting to yield low single-digit range [34] Question: Structural cost reductions - The company is focused on structural cost reductions, targeting about 3,000 indirect positions, with a commitment to not add those back [35][36] Question: Outlook for CSA residential business - Management expects CSA residential volume to be flat to slightly up, with a focus on reducing inventory levels in the field [40][41] Question: Demand in non-data center verticals - Non-data center demand in commercial HVAC was up in the low teens, with mixed performance across various sectors [42][43] Question: Data center backlog and growth expectations - The company is on track to end the year with a backlog around $900 million, supporting growth expectations for 2026 [54][55]

Core Viewpoint - Carrier Global reported quarterly earnings of $0.67 per share, exceeding the Zacks Consensus Estimate of $0.55 per share, but down from $0.83 per share a year ago, indicating an earnings surprise of +21.82% [1][2] Financial Performance - The company achieved revenues of $5.58 billion for the quarter ended September 2025, surpassing the Zacks Consensus Estimate by 0.93%, but down from $5.98 billion year-over-year [2] - Over the last four quarters, Carrier Global has exceeded consensus EPS estimates four times and topped revenue estimates three times [2] Stock Performance - Carrier Global shares have declined approximately 14.6% year-to-date, contrasting with the S&P 500's gain of 16.9% [3] - The stock currently holds a Zacks Rank 5 (Strong Sell), indicating expectations of underperformance in the near future [6] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.51 on revenues of $5.19 billion, and for the current fiscal year, it is $2.71 on revenues of $22.05 billion [7] - The trend of estimate revisions for Carrier Global was unfavorable prior to the earnings release, which may impact future stock movements [5][6] Industry Context - The Building Products - Air Conditioner and Heating industry is currently ranked in the bottom 11% of over 250 Zacks industries, suggesting potential challenges for stocks within this sector [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, emphasizing the importance of monitoring these changes [5]

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Q3 2025 Earnings Conference Call October 28, 2025 2 Q3 2025 Summary | Sales | $5,579M | Highlights | | --- | --- | --- | | | Organic1 (4%) Y/Y | CSA commercial3 continues to outperform market with Q3 sales up | | | | 30%, including data centers up ~250% | | Adjusted Operating Profit1 | $823M (21%) Y/Y | CSA resi sales down ~30%; field inventory levels down significantly | | | | RLC Europe heat pump sales up mid-teens; up ~45% in Germany | | Adjusted | 14.8% | Continued DD growth in container and CSAME India ...

Financial Performance - Carrier reported third-quarter 2025 net sales of $5.579 billion, a decrease of 7% year-over-year, with organic sales down 4%[4] - The company's GAAP EPS from continuing operations was $0.47, down 24% year-over-year, while adjusted EPS was $0.67, down 13%[7] - Operating profit for the quarter was $539 million, reflecting a 29% decline from the previous year, primarily due to weaker residential end-markets[6] - The company expects full-year 2025 sales of approximately $22 billion and adjusted EPS of around $2.65, down from prior guidance of $23 billion and $3.00-$3.10, respectively[17] - The Climate Solutions Americas segment saw net sales decline by 8%, with organic sales also down 8%, driven by a 30% increase in Commercial but a 30% decrease in Residential[8] - The Climate Solutions Europe segment reported a 4% increase in net sales, although organic sales were down 3%[9] - Carrier's total net sales for Q3 2025 were $5,579 million, a decrease of 6.8% compared to $5,984 million in Q3 2024[33] - Adjusted operating profit for Q3 2025 was $539 million, down from $763 million in Q3 2024, reflecting a decline of 29.5%[33] - The adjusted earnings per share (EPS) for Q3 2025 was $0.50, compared to $0.49 in Q3 2024, indicating a slight increase of 2.0%[33] - For the three months ended September 30, 2025, net earnings decreased to $455 million from $481 million in 2024, representing a decline of 5.4%[37] - The consolidated segment operating profit fell to $865 million, down 22.9% from $1,122 million in the prior year[39] - The Climate Solutions Transportation segment experienced a significant decline in net sales, dropping 20% to $745 million from $937 million in the previous year[41] - For the nine months ended September 30, 2025, total net sales decreased by 2% to $16,910 million compared to $17,338 million in 2024[39] - The adjusted operating profit for the three months ended September 30, 2025, was $823 million, down from $1,044 million in 2024, reflecting a decrease of 21.1%[45] - Earnings from continuing operations attributable to common shareowners for Q3 2025 were $576 million, compared to $705 million in Q3 2024, a decrease of 18.3%[50] - Diluted earnings per share from continuing operations for Q3 2025 were $0.67, down from $0.77 in Q3 2024, a decline of 12.9%[50] Cash Flow and Shareholder Returns - Free cash flow for the third quarter was $224 million, with net cash flows from operating activities at $341 million[16] - Carrier returned $3 billion to shareholders year-to-date, including $2.4 billion in share repurchases[4] - Carrier's board approved a $5 billion share repurchase authorization, reflecting confidence in the company's strategy[4] - Free cash flow for the nine months ended September 30, 2025, was $1,212 million, significantly higher than $119 million for the same period in 2024[51] - The company reported a net cash flow used in continuing financing activities of $591 million for the three months ended September 30, 2025, compared to $1,544 million in 2024[37] Balance Sheet and Assets - Total assets increased to $38,077 million as of September 30, 2025, up from $37,403 million at the end of 2024, representing a growth of 1.8%[35] - Cash and cash equivalents decreased significantly to $1,423 million from $3,969 million at the end of 2024, a decline of 64.1%[35] - Long-term debt rose to $11,336 million as of September 30, 2025, compared to $11,026 million at the end of 2024, an increase of 2.8%[35] - Carrier's total liabilities increased to $23,238 million as of September 30, 2025, compared to $23,008 million at the end of 2024, an increase of 1.0%[35] - The company’s equity increased to $14,839 million as of September 30, 2025, up from $14,395 million at the end of 2024, reflecting a growth of 3.1%[35] - Net debt increased to $10,493 million as of September 30, 2025, up from $8,393 million at the end of 2024, reflecting a rise of 25.0%[52] Expenses and Costs - Research and development expenses for Q3 2025 were $151 million, down from $172 million in Q3 2024, a reduction of 12.2%[33] - The company incurred restructuring costs of $50 million for the three months ended September 30, 2025, compared to $60 million in the same period last year[45] - Total adjustments for Q3 2025 amounted to $295 million, compared to $195 million in Q3 2024, reflecting an increase of 51.3%[50] Margins and Tax Rate - The operating margin for Q3 2025 was 14.8%, down from 17.4% in Q3 2024, showing a decrease of 1.9 percentage points[47] - The effective tax rate for Q3 2025 was 17.2%, compared to 23.3% in Q3 2024, indicating a decrease of 6.1 percentage points[50] - The Climate Solutions Europe segment's operating margin decreased to 9.3% from 10.4% year-over-year[39]

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Core Insights - Carrier Global Corporation reported a 7% decline in net sales for Q3 2025, totaling $5.6 billion compared to $5.98 billion in Q3 2024, with organic sales down 4% [3][4] - The company experienced strong growth in Commercial HVAC, which increased by 30% in the Americas, but this was offset by a significant decline in the Residential segment [2][5] - Carrier announced a $5 billion share repurchase authorization, reflecting confidence in its strategy and commitment to shareholder value [2] Financial Performance - Total net sales for Q3 2025 were $5,579 million, down from $5,984 million in Q3 2024, marking a 7% decrease [3] - Operating profit decreased by 29% to $539 million, with an operating margin of 9.7%, down from 12.8% the previous year [3][4] - Adjusted operating profit was $823 million, a 21% decline year-over-year, with an adjusted operating margin of 14.8% [4][8] Segment Performance - Climate Solutions Americas (CSA) reported net sales of $2,711 million, an 8% decrease, with organic sales also down 8% [5][6] - Climate Solutions Europe (CSE) saw a 4% increase in net sales to $1,290 million, although organic sales declined by 3% [7][8] - Climate Solutions Asia Pacific, Middle East & Africa (CSAME) experienced a slight decline in net sales by 1% to $833 million, with organic sales down 2% [9][10] - Climate Solutions Transportation (CST) reported a significant 20% decline in net sales to $745 million, although organic sales increased by 6% [11][12] Cash Flow and Shareholder Returns - Net cash flows from operating activities were $341 million, with free cash flow of $224 million for the quarter [13][27] - The company returned $3 billion to shareholders year-to-date, including $2.4 billion in share repurchases [8][14] - Carrier expects full-year 2025 sales to be approximately $22 billion and adjusted EPS around $2.65 [8][14] Guidance and Future Outlook - Carrier anticipates a revenue headwind of approximately $750 million from the exit of Commercial Refrigeration [14] - The company projects organic sales to be flat for the full year, with adjusted operating margin guidance of 15.0% to 15.5% [14]

Core Viewpoint - Carrier Global Corporation has announced a $5 billion share repurchase authorization, reflecting confidence in its strategy and commitment to shareholder value [1]. Summary by Sections Share Repurchase Authorization - The new share repurchase authorization amounts to $5 billion, in addition to the remaining balance of approximately $800 million as of September 30, 2025, bringing the total current repurchase authorization to approximately $5.8 billion [2]. Company Overview - Carrier Global Corporation is a global leader in intelligent climate and energy solutions, focusing on innovations that enhance comfort, safety, and sustainability [4]. - The company has a history of leadership in climate solutions, including temperature control and air quality, and aims to improve lives and empower critical industries [4].

Core Insights - Carrier Global (CARR) is set to report its third-quarter 2025 results on October 28, with expectations of adjusted EPS around $0.80 and sales near $6 billion, indicating mid-single-digit organic growth year-over-year [2][9] - The Zacks Consensus Estimate for third-quarter earnings is currently at 55 cents per share, reflecting a 14% decrease over the past 30 days and a year-over-year decline of 33.73% [2][3] - Revenue estimates stand at $5.53 billion, suggesting a 7.62% year-over-year decline [3] Performance Influencers - Strong demand in the Heating, Ventilating, and Air Conditioning (HVAC) sector and aftermarket services is anticipated to drive revenue growth in Q3 [4] - The integration of Viessmann Climate Solutions is expected to enhance heat pump volumes and expand sustainable energy solutions [5] - Aftermarket services have been experiencing double-digit growth, likely continuing in the upcoming quarter [5] - Currency movements are projected to provide a $200 million year-over-year benefit from foreign currency translation, alongside another $200 million from tariff-related pricing adjustments [6] Challenges - Declining residential sales in the Americas due to weaker consumer demand and high inventory levels, as well as ongoing softness in residential sales in China, are expected to challenge performance [7] - Unfavorable product and regional mix in Europe, along with tariff-related margin pressures, may further impact quarterly results [7] Earnings Outlook - The current Earnings ESP for Carrier Global is +1.72%, but it holds a Zacks Rank of 5 (Strong Sell), indicating lower odds of an earnings beat [8]

Core Insights - Carrier Global Corporation has made a strategic investment in Net Feasa to enhance real-time container visibility at sea, addressing a critical gap in logistics visibility [1][2]. Investment Details - The investment is part of Carrier's commitment to intelligent, connected cold chain solutions, ensuring containers are visible and secure throughout their journey, including during maritime transit [2][3]. - The partnership aims to integrate Net Feasa's Vessel Control Tower technology with Carrier's Lynx Fleet platform, enabling shipping lines to make faster, data-driven decisions [3]. Technology and Capabilities - Net Feasa's dual-mode vessel networks comply with maritime cybersecurity and radio standards, facilitating secure data transmission across various shipping routes [4]. - The collaboration will expand Carrier's connected cold chain capabilities, incorporating mixed-fleet monitoring, advanced wireless networks, and AI-driven analytics [3][4]. Company Overview - Carrier Global Corporation is recognized as a leader in intelligent climate and energy solutions, focusing on innovations that enhance comfort, safety, and sustainability [4].