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Carrier (CARR) Q3 Earnings Beat Estimates, Sales Rise Y/Y

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  • CARR

Carrier Global CARR has reported third-quarter 2021 adjusted earnings of 71 cents per share, which beat the Zacks Consensus Estimate by 7.6%. Further, the figure increased 5.9% year over year.

Net sales of $5.341 billion improved 7% year over year, owing to solid momentum across HVAC, transport refrigeration, and Fire and Security.

However, the top line missed the Zacks Consensus Estimate of $5.343 billion.

Product sales (84.4% of net sales) increased 7.6% year over year to $4.5 billion. Service sales (15.6% of net sales) grew 2.7% year over year to $831 million.

Carrier Global Corporation Price, Consensus and EPS Surprise

Carrier Global Corporation Price, Consensus and EPS Surprise
Carrier Global Corporation Price, Consensus and EPS Surprise

Carrier Global Corporation price-consensus-eps-surprise-chart | Carrier Global Corporation Quote

Quarterly Details

HVAC revenues (57.2% of net sales) increased 5.6% year over year to $3.05 billion.

Refrigeration revenues (18.9% of net sales) rose 15.4% from the year-ago quarter to $1.01 billion.

Fire & Safety revenues (25.8% of net sales) grew 4% from the year-ago quarter to $1.4 billion.

The cost of goods sold was $3.2 billion, up 9.9% year over year. The cost of services sold rose 1.9% to $568 million.

Selling, general & administrative, and research & development expenses grew 9.8% and 23% year over year to $748 million and $123 million, respectively.

Adjusted operating margin decreased 1% year over year to $858 million. The operating margin contracted 120 basis points on a year-over-year basis to 16.1%.

Balance Sheet

As of Sep 30, 2021, Carrier had cash and cash equivalents of $2.7 billion compared with $2.6 billion as of Jun 30, 2021.

Total debt (including current portion), as of Sep 30, 2021, was $9.69 billion compared with $9.72 billion as of Jun 30, 2021.

The company generated $579 million in cash from operations compared with $561 million recorded in the previous quarter.

Capital expenditure stood at $74 million and free cash flow was $505 million for the third quarter.

Guidance

For 2021, Carrier expects sales growth of 16%. Previously, the same was expected between 14% and 16%. Organic sales growth is expected at 13% compared with 10-12% mentioned earlier. The Zacks Consensus Estimate for 2021 revenues is pegged at $20.2 billion.

Adjusted earnings are projected at $2.20 per share compared with the previously mentioned $2.10-$2.20. The Zacks Consensus Estimate for earnings is pegged at $2.21 per share.

The free cash flow guidance is unchanged at $1.9 billion.

Zacks Rank & Stocks to Consider

Currently, Carrier has a Zacks Rank #3 (Hold).

Some better-ranked stocks in the broader technology sector are Trimble TRMB, Semtech Corp. SMTC and Apple AAPL, each carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Long-term earnings growth rates for Trimble, Semtech and Apple are currently projected at 10%, 12.5%, and 12.5%, respectively.


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