Carrier Global Corporation — Third Quarter 2026 Earnings Summary

Financial Performance:

• Total company net sales increased 12% year-over-year to $6.3 billion, with organic sales up 15% (divestitures were a 3% headwind).
• GAAP operating loss was $2.3 billion compared to operating profit of $539 million in the prior year, primarily due to a $3.1 billion goodwill impairment charge.
• Adjusted operating profit increased 33% to $1.1 billion, with adjusted operating margin expanding 260 basis points to 17.4%.
• GAAP diluted earnings per share (EPS) from continuing operations was $(3.16), while adjusted diluted EPS was $0.87, up 30% year-over-year.
• Net cash flows from operating activities were $813 million, and free cash flow was $674 million for the quarter.
• The company recorded approximately $130 million of operating profit benefit from IEEPA refunds.

Guidance and Future Outlook:

• Full-year 2026 sales guidance raised to $23.8 billion to $24.0 billion (previously ~$23 billion), with organic growth expected at approximately 10%.
• Full-year 2026 adjusted operating profit guidance remains at ~$3.5 billion.
• Full-year 2026 adjusted EPS guidance raised to $2.85 to $2.90 (previously ~$2.90).
• Full-year 2026 free cash flow guidance remains at ~$2 billion.
• Management expects to return approximately $2.3 billion to shareowners through dividends and share repurchases in 2026.
• CEO David Gitlin stated expectations to deliver double-digit organic sales and adjusted EPS growth in 2026, with record backlog levels supporting momentum into 2027 and beyond.

Business Segments and Product Lines:

• Climate Solutions Americas (CSA): Net sales grew 24% to $3.4 billion with organic sales up 25%. Segment operating margin expanded 250 basis points to 22.2%. Residential and Commercial sales grew over 30% and 25%, respectively.
• Climate Solutions Europe (CSE): Net sales increased 3% to $1.3 billion with organic sales up 12% (offset by 7% divestiture headwind and 2% currency headwind). Segment operating margin increased 330 basis points to 12.6%. Residential heat pumps and air conditioning sales grew ~35%.
• Climate Solutions Asia Pacific, Middle East & Africa (CSAME): Net sales increased 2% to $848 million with organic sales up 3%. Commercial sales grew 10%, partially offset by a mid-single digit decline in RLC. Segment operating margin increased 50 basis points to 12.1%.
• Climate Solutions Transportation (CST): Net sales decreased 3% to $726 million with organic sales down 3%. Growth in Container was offset by declines in Truck and Trailer. Segment operating margin increased 70 basis points to 16.1%.
• Total company orders were up ~35%, with Commercial HVAC up ~60% and data centers up ~300%.
• Signed long-term agreements (LTAs) valued at multiple billions of dollars with minimum volume commitments.
• Record backlog exceeded $8.5 billion, up 60% versus last year, including LTA minimums.

Market and Competitive Landscape:

• Continued strong demand for differentiated solutions is driving order growth, particularly in data centers.
• The company is navigating industry-wide macro pressures, including tariffs and increasing input costs.
• Divestitures of Riello (completed July 1) and NORESCO (completed August 3) created year-over-year revenue headwinds of approximately $225 million and $125 million, respectively.

Risks and Challenges:

• Goodwill impairment charge of $3.1 billion related to the Climate Solutions Europe reporting unit.
• Increased input costs and tariffs partially offset volume and price benefits.
• Inventory-related reserves impacted segment operating margins in Europe.
• Higher effective tax rate and higher non-controlling interest related to IEEPA refunds impacted adjusted EPS.

Management Commentary and Tone:

• Chairman & CEO David Gitlin described the performance as "strong," highlighting double-digit growth in orders, sales, and adjusted EPS.
• Management expressed confidence in sustaining momentum into 2027 and beyond due to record backlog levels.
• The tone emphasized the benefit of a differentiated product portfolio and recovery in RLC end markets.

Other Key Points:

• Returned approximately $600 million to shareowners through dividends and repurchases in the quarter.
• Completed divestitures of Riello and NORESCO during the third quarter.
• GAAP results included a goodwill impairment charge and IEEPA refunds; adjusted EPS included a ~$0.10 benefit from IEEPA refunds net of ~($0.02) NCI impact.
• Conference call scheduled for October 29, 2026, at 7:30 a.m. ET.