Air Conditioning Provider Carrier Global Enjoyed A Hot Q3, Stock Rises After Annual Outlook Hiked

Carrier Global Corp CARR reported third-quarter FY23 net sales growth of 5% year-over-year to $5.73 billion, +3% on an organic basis, missing the consensus of $5.89 billion.

CARR reported adjusted EPS of $0.89, beating the analyst consensus of $0.79.

Organic sales strength continued with 4% growth in the HVAC segment, with commercial HVAC up high-single-digits and North America residential and light commercial HVAC up 5% organically.

Adjusted operating profit of $1.04 billion was up 25.3% compared to last year, with a margin of 18.2%, up 242 bps.

Net cash provided by operating activities for nine months ended September 30, 2023, totaled $1.54 billion compared to $620 million in 3Q22.

For Q3, cash inflows from operating activities were $1.04 billion vs. $699 million in 3Q22, and free cash flow generation was $949 million.

The company exited the quarter with cash and equivalents worth $3.90 billion.

Also Read: Carrier Global's Weaker Fundamental Metrics In Focus: JP Morgan Analyst Sees Less Room To Run

"Traction with our digitally enabled life-cycle solutions continues to build as we delivered another quarter of double-digit aftermarket growth. We are again raising our full year guidance for adjusted operating margin and adjusted EPS," commented Carrier Chairman & CEO David Gitlin.

"We remain on track to complete the transformational combination with Viessmann Climate Solutions in early January 2024, and we are pleased with the interest level in our strategic business exits," he added.

FY23 Outlook, updated: Carrier sees FY23 Adj. EPS of ~$2.70 (prior $2.55-$2.65) versus the $2.63 estimate. The company reiterates net sales expectations of over $22 billion (consensus $22.46 billion).

CARR sees an adjusted operating margin of ~14.5% (prior 14% - 14.5%) and FCF of Over $1.9 billion.

Price Action: CARR shares are trading higher by 2.57% at $48.25 on the last check Thursday.