Carrier Global Corp. Q2 2026 Filing Summary
Business Context and Reporting Period
This Form 10-Q covers the quarterly period ended June 30, 2026, for Carrier Global Corporation, a global leader in intelligent climate and energy solutions. The Company operates through four segments: Climate Solutions Americas, Europe, Asia Pacific/Middle East & Africa, and Transportation. As of July 15, 2026, there were 824,325,057 shares of Common Stock outstanding.
Key Financial Metrics
| Metric (in millions) | Q2 2026 | Q2 2025 | YTD 2026 | YTD 2025 |
|---|---|---|---|---|
| Net Sales | $6,351 | $6,113 | $11,692 | $11,331 |
| Operating Profit | $825 | $903 | $1,083 | $1,532 |
| Net Earnings (Attributable to Common) | $501 | $591 | $739 | $1,003 |
| Diluted EPS | $0.60 | $0.68 | $0.88 | $1.15 |
| Operating Cash Flow (YTD) | $953 | $752 | $953 | $752 |
| Cash & Equivalents | $1,344 | $1,555 | $1,344 | $1,555 |
| Total Debt | $11,952 | $11,833 | $11,952 | $11,833 |
| Net Debt | $10,608 | $10,278 | $10,608 | $10,278 |
Margins: Gross margin for Q2 2026 was 27.2% of net sales, down from 28.9% in Q2 2025. Operating profit margin for Q2 2026 was 13.0%, compared to 14.8% in the prior year.
Material Changes vs. Prior Period
- Revenue Growth: Net sales increased 4% in Q2 and 3% YTD, driven by organic growth of 3% (Q2) and 1% (YTD), supported by improved end-market demand in the Americas, Europe, and Asia Pacific segments.
- Profitability Decline: Operating profit decreased 9% in Q2 and 29% YTD. This was primarily due to higher input costs (including tariffs), unfavorable business mix, and increased restructuring costs.
- Restructuring Costs: The Company incurred $116 million in restructuring costs YTD 2026, compared to $55 million in YTD 2025. Q2 2026 saw $8 million in restructuring costs.
- Impairment Charge: A $46 million non-deductible impairment charge was recorded in Q2 2026 related to the Riello business held for sale.
- Tax Rate: The effective tax rate for Q2 2026 was 25.0% (up from 20.0% in Q2 2025) due to the Riello impairment and higher German tax rates. However, the YTD rate was 9.4% (down from 20.1%) due to a $99 million tax benefit from a Swiss valuation allowance release.
Guidance, Outlook, and Risks
Management Commentary: Management notes that while tariffs implemented in 2025 were fully mitigated, the Company continues to evaluate exposure to new Section 232 tariffs on steel, aluminum, and copper announced in April 2026. The Company expects to mitigate 2026 impacts through supply chain adjustments and pricing actions.
Divestitures:
- Riello: The sale of the Riello business to Ariston Group for approximately $430 million was completed on July 1, 2026.
- Noresco: An agreement was reached to sell the Noresco business to Opterra Energy Services, LLC, expected to close in Q3 2026.
Capital Allocation:
- Share Repurchases: The Company repurchased 12.0 million shares for $748 million in the first six months of 2026. Approximately $4.6 billion remains under the current $12.1 billion authorization.
- Dividends: A quarterly dividend of $0.24 per share was declared in June 2026.
Risks and Contingencies:
- Legal Proceedings: The Company is involved in AFFF litigation with a proposed settlement involving $615 million in cash payments over five years and insurance proceeds. Antitrust class-action lawsuits were filed in March 2026 alleging price-fixing; the Company believes these lack merit.
- Market Risks: Exposure to foreign currency fluctuations, commodity price volatility, and global economic conditions remains significant.
Investor Verification Checklist
- Verify Riello Sale Proceeds: Confirm the final gross proceeds and net impact on cash flow from the July 1, 2026, completion of the Riello divestiture.
- Monitor Tariff Impact: Assess the actual financial impact of the April 2026 Section 232 tariffs on steel, aluminum, and copper on Q3 and Q4 margins.
- Review AFFF Settlement Status: Track the progress of court approvals for the AFFF settlement agreements and the realization of expected insurance proceeds.
- Check Restructuring Utilization: Monitor the utilization of the $111 million restructuring reserve to ensure costs align with projected savings.
- Assess China Performance: Verify the trend in the Asia Pacific segment, specifically the 13-14% sales decline in China due to economic challenges.