Transportation / Container Strength
CST Container business grew nearly 40% in the quarter and management expects margin expansion for CST (~+50 bps) for the year.
Carrier Global
· CARR
April 30th, 2026
Summary
- Earnings Call Date:
- 2026-04-30
- Change Since:
- +13.55%
- Next Earnings Date:
- 2026-07-23
Earnings Call Sentiment
PositiveThe call contained multiple strong operating and commercial highlights — especially exceptional order momentum (notably in data centers and CHVAC), product and system innovation, aftermarket growth, and better-than-expected Q1 performance versus guidance — and management reaffirmed full-year revenue and EPS targets while implementing pricing to offset input-cost pressures. Offsetting these positives were meaningful short-cycle weaknesses (notably CSA residential and China RLC), segment margin pressures from promotions and under-absorption, tariff-driven cost inflation, and near-term guidance reflecting some softness in Q2. On balance the call emphasized durable growth drivers and actionable mitigation (pricing, productivity, supply-chain actions) that outweigh the near-term headwinds.
Company Guidance
Carrier reaffirmed its 2026 guidance: roughly $22 billion of revenue with organic growth flat to low single digits (includes a roughly $250 million YoY headwind from the Riello exit), and expects to realize an additional 2 points of pricing globally (about $400–$450 million, ~75% related to Section 232 tariffs) to offset input‑cost pressure; adjusted EPS is reaffirmed at approximately $2.80 (up high single digits vs. 2025) with no change to full‑year operating profit, free cash flow or share‑repurchase plans. Segment guidance is largely unchanged (CSA and CSE margins steady), with CSAME margins expected to decline ~50 bps and CST to expand ~50 bps. For Q2 the company expects revenue just below $6.0 billion (including about $100 million of Riello), operating margin of ~17%, a ~24% tax rate, adjusted EPS of about $0.80 and a few hundred million dollars of free cash generation; the current data‑center backlog fully covers the $1.5 billion of planned data‑center sales for 2026.
Strong Order Momentum
Total company orders in Q1 rose 11%; global CHVAC orders up 35%; CSA commercial HVAC orders up over 80%; global data center orders surged over 500%.
Data Center Backlog and Wins
Current data center backlog fully covers the company's $1.5B expected data center sales for 2026, with management indicating they are targeting to exceed that number and citing hundreds of millions of dollars in QuantumLeap/orders (management referenced ~$300–$400M won).
CHVAC Transformation and Share Gains
Since the spin, global CHVAC sales are up ~80%, backlog up ~130%, share up ~500 basis points, and margins are ~3x higher—demonstrating major market share and margin improvement.
Product and Systems Innovation
Multiple new product rollouts and system initiatives: highly efficient fan coil, air-to-water heat pump, expanded Viessmann lineup, Carrier Energy Gen1 launch planned, multi-megawatt maglev chillers, expanding CDU portfolio (1MW shipped; 3MW and 5MW on roadmap), and expanded investment/partnership with ZutaCore for liquid cooling.
Aftermarket & Connectivity Traction
Aftermarket playbook progressing: connected devices in the field up over 25% in the quarter; Lynx subscriptions cover ~240,000 units with plans to triple in coming years; company expects sixth consecutive year of double-digit aftermarket growth.
Segment and Regional Wins
CSA Light Commercial up nearly 10% (share gains in large retail accounts and traction of new hybrid rooftop units); strong heat-pump demand in Europe (Germany heat-pump sales up ~20%, Europe low-teens) driven by favorable electricity-to-gas dynamics.
Financial Beat vs Guidance and Capital Return
Q1 reported sales $5.3B, adjusted operating profit $594M, adjusted EPS $0.57 — all better than Q1 guidance; free cash flow was a small outflow ($15M) but better than expected; returned about $500M to shareholders via dividends and buybacks.
Full-Year Guidance Reaffirmed with Upside Pricing
Reaffirmed full-year revenue outlook of approximately $22B with organic growth flat to low single digits; adjusted EPS guidance ~ $2.80 (up high single digits vs 2025); company now expects to realize an additional ~2 points of pricing globally in 2026 to offset input cost pressures.
Operator
Good morning, and welcome to Carrier's First Quarter 2026 Earnings Conference Call. I would like to introduce you to today's host for the conference, Michael Rednor, Vice President of Investor Relations. Please go ahead.
Michael Rednor
Good morning, and welcome to Carrier's First Quarter 2026 Earnings Conference Call. On the call with me today are David Gitlin, Chairman and Chief Executive Officer; and Patrick Goris, Chief Financial Officer. Except where otherwise noted, the company will speak to results from continuing operations, excluding restructuring costs and certain significant nonrecurring items. A reconciliation of these and other non-GAAP financial measures can be found in the appendix of the webcast. We also remind listeners that the presentation contains forward-looking statements, which are subject to risks and uncertainties. Carrier's SEC filings, including our Form 10-K and quarterly reports on Form 10-Q, provide details on important factors that could cause actual results to differ materially. With that, I'd like to turn the call over to Dave.
David Gitlin
Thanks, Mike, and good morning, everyone. Let me start by thanking our team globally who continue to deliver differentiated solutions for our customers and help preserve the planet for generations to come, while also delivering financial results that exceeded our expectations. Demand for our commercial HVAC and aftermarket solutions remained strong, while our shorter-cycle businesses have performed better than expected. Company orders in 1Q were up 11% led by global CHVAC up 35%, including CSA commercial HVAC up over 80%. Global data ...
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