Carrier Global Delivers Mixed Q2 Results, Plan To Repurchase $1B Shares In H2

Carrier Global Corp CARR shares are trading lower after it reported second-quarter FY24 results.

Net sales rose 12% Y/Y to $6.70 billion, missing the consensus of $7.00 billion.

Revenue included 2% organic growth and a 12% boost from the Viessmann Climate Solutions acquisition, partially offset by a 2% decline from divestitures.

GAAP operating profit of $3.7 billion was up over 650% from last year, primarily due to the gain on the sale of Access Solutions and the addition of Viessmann Climate Solutions. Adjusted operating profit of $1.2 billion was up 26% Y/Y, driven by contribution from Viessmann Climate Solutions.

Carrier Chairman & CEO David Gitlin said, “We delivered solid sales and roughly 30% orders growth as we continue to outperform in our markets. Our strong operational execution drove 200 basis points of adjusted operating margin expansion and double-digit adjusted earnings growth.”

The company reported adjusted EPS of $0.87, beating the consensus of $0.84.

Operating cash flow totaled $660 million, and capital expenditures were $111 million, resulting in a free cash flow of $549 million.

The company exited the quarter with cash and cash equivalents worth $2.92 billion.

Gitlin added that, “Year-to-date, we also closed on two of our four business exits, and the remaining two continue to track well. The proceeds from the exits, combined with our strong free cash flow performance, have enabled us to reduce net debt by about $5 billion in the quarter and we now plan to repurchase about $1 billion of shares in the second half of 2024.”

FY24 Outlook: Carrier reiterated adjusted EPS outlook of $2.80-$2.90 versus the $2.86 estimate. 

The company reduced its sales outlook to ~$25.5 billion from previously expected ~$26 billion (vs. $25.555 billion estimate), with mid-single-digit organic growth.

Carrier reiterated outlook for an adjusted operating margin of 15.5% and a free cash flow of ~$0.4 billion.

Investors can gain exposure to the stock via First Trust US Equity Opportunities ETF FPX and Carbon Collective Climate Solutions U.S. Equity ETF CCSO.

Price Action: CARR shares are down 2.73% at $64.19 at the last check Thursday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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