Carrier (CARR) Q4 Earnings Beat Estimates, Revenues in Line
Carrier Global CARR reported fourth-quarter 2023 adjusted earnings of 53 cents per share, which surpassed the Zacks Consensus Estimate by 3.92%. The figure increased 32.5% year over year.
Net sales of $5.10 billion missed the Zacks Consensus Estimate by 2.82% but remained unchanged year over year.
Product sales (87% of net sales) of $4.44 billion decreased 1.9% year over year. Service sales (13% of net sales) of $661 million were up 14.4% year over year.
Carrier shares were up 1.32% in pre-market trading. The company’s shares have underperformed the Zacks Computer & Technology sector year to date. While CARR shares have declined 2.1%, the Computer & Technology sector has increased 5.9%.
Carrier Global Corporation Price
Carrier Global Corporation price | Carrier Global Corporation Quote
Quarter Details
HVAC revenues of $3.29 billion accounted for 64.5% of net sales. The figure lagged the Zacks Consensus Estimate by 5.33% and declined 0.7% year over year.
Refrigeration revenues of $1.02 billion were up 8.6% year over year and accounted for 20.1% of net sales. The figure missed the consensus mark by 6.94%.
Fire & Security revenues of $909 million were down 5.3% year over year and contributed 17.8% of net sales. The reported figure lagged the consensus mark by 0.3%.
Research & development (R&D) expenses increased 14.1% year over year to $170 million. As a percentage of revenues, R&D expenses declined 10 basis points (bps) year over year.
Selling, general & administrative (SG&A) expenses grew 42.8% year over year to $961 million. As a percentage of revenues, SG&A expenses increased 570 bps year over year.
Adjusted operating margin expanded 130 bps on a year-over-year basis to 12.4%.
Adjusted operating margin of the HVAC segment expanded 250 bps year over year to 12.1%.
The Refrigeration segment reported an adjusted operating margin of 10.5%, which contracted 150 bps year over year.
Fire & Security’s adjusted operating margin was 14.2%, which contracted 30 bps year over year.
Balance Sheet
As of Dec 31, 2023, Carrier had cash and cash equivalents of $10.02 billion compared with $3.9 billion as of Sep 30, 2023.
Total debt (including the current portion) as of Dec 31, 2023, was $14.29 billion compared with $8.79 billion as of Sep 30, 2023.
In the reported quarter, Carrier generated $1.06 million in cash from operations, up from $1.04 billion in the prior quarter.
Capital expenditure was $233 million in the fourth quarter of 2023. Free cash flow was $829 million for the reported quarter.
Guidance
For 2024, Carrier expects sales of more than $26.5 billion. The Zacks Consensus Estimate for sales is pegged at $22.92 billion.
The adjusted operating margin is expected between 15% and 15.5%.
CARR anticipates adjusted earnings between $2.80 per share and $2.90 per share. The Zacks Consensus Estimate for the same is pegged at $2.81 per share.
The company expects a free cash flow of roughly $0.7 billion.
Zacks Rank & Stocks to Consider
Currently, Carrier has a Zacks Rank #3 (Hold).
Shopify SHOP, Pinterest PINS and AvidXchange AVDX are some better-ranked stocks that investors can consider in the broader sector, each sporting a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Shopify shares have gained 4.5% year to date. SHOP is set to report its fourth-quarter 2023 results on Feb 13.
Pinterest shares have gained 7.1% year to date. PINS is set to report its fourth-quarter 2023 results on Feb 8.
AvidXchange shares have declined 9% year to date. AVDX is set to report its fourth-quarter 2023 results on Feb 28.
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