A month has gone by since the last earnings report for Carrier Global (CARR). Shares have lost about 2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Carrier Global due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Carrier Global Corporation before we dive into how investors and analysts have reacted as of late.
Carrier Q2 Earnings & Sales Top Estimates, HVAC Orders Up Y/Y
Carrier reported better-than-expected second-quarter 2026 financial results with adjusted earnings and net sales surpassing the Zacks Consensus Estimate. On the other hand, the bottom line declined year over year while the top line grew.
The company’s organic expansion marked an earlier-than-expected return to growth, aided by improving residential and light commercial conditions in the Americas and Europe. During the quarter, CARR’s orders jumped roughly 40%, while commercial HVAC orders increased about 65%, reflecting robust data-center demand.
Carrier’s Q2 Earnings & Sales Trends
The quarter’s adjusted earnings per share were 86 cents, down 7% year over year but 3.6% above the Zacks Consensus Estimate of 83 cents.
Net sales increased 4% to $6.35 billion year over year and beat the consensus mark by 5.5%. Product sales increased to $5.63 billion from $5.48 billion in the year-ago quarter. Service sales advanced to $717 million from $636 million, providing a stronger recurring-revenue contribution.
CARR's Americas Unit Leads Quarterly Growth
Climate Solutions Americas generated sales of $3.37 billion, up 4% on both a reported and organic basis. Residential sales increased 9%, while light commercial sales rose 10% on solid retail and K-12 demand. Commercial sales declined 8% because of customer delivery timing. Segment operating profit decreased 6% to $823 million year over year, while margin fell 260 basis points (bps) to 24.4%, as price-led revenue growth was outweighed by input costs and an unfavorable mix.
Carrier Sees Mixed Regional Segment Trends
Climate Solutions Europe revenues increased 6% to $1.32 billion, including 3% organic growth. Residential and light commercial sales rose high-single digits, supported by an approximately 20% increase in heat-pump sales, while commercial revenues declined mid-single digits.
Climate Solutions Asia Pacific, Middle East & Africa sales grew 4% to $917 million. Double-digit gains in India, the Middle East, Southeast Asia and Australia offset continued weakness in China. Transportation revenues rose 2% to $738 million, as roughly 40% container growth countered low-teens declines in global truck and trailer sales.
CARR Faces Margin Pressure Across Businesses
Adjusted operating profit declined 6% year over year to $1.10 billion. Adjusted operating margin contracted 190 bps to 17.2%, as favorable volume and productivity were more than offset by higher input costs and an unfavorable business mix.
Reported operating profit fell 9% to $825 million, with the corresponding margin narrowing 180 bps to 13%. A higher adjusted effective tax rate of 23.2%, compared with 22.1% a year earlier, also weighed on earnings, while a lower share count offered a partial offset.
Carrier Generates Strong Cash Flow & Returns Capital
Operating cash flow totaled $927 million, up from $649 million in the prior-year quarter. After capital expenditures of $117 million, free cash flow reached $810 million compared with $568 million a year earlier.
Carrier returned about $640 million to shareholders through dividends and share repurchases during the second quarter. The company maintained its full-year free cash flow target of approximately $2 billion and share-repurchase expectation of about $1.5 billion.
CARR Lifts 2026 Sales & Profit Outlook
Carrier raised its 2026 sales outlook to approximately $23 billion from about $22 billion. The company now expects organic sales growth in the mid-to-high-single-digit range, compared with its prior expectation of flat to low-single-digit growth. Adjusted operating profit is projected at roughly $3.5 billion, up from the previous forecast of $3.4 billion. Adjusted earnings guidance increased to approximately $2.90 per share from $2.80, including an estimated five-cent headwind from the NORESCO exit and start-up costs for a new U.S. manufacturing facility.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
VGM Scores
At this time, Carrier Global has a subpar Growth Score of D, however its Momentum Score is doing a bit better with a C. Following the exact same course, the stock was allocated a score of C on the value side, putting it in the middle 20% for value investors.
Overall, the stock has an aggregate VGM Score of C. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions looks promising. Interestingly, Carrier Global has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
Carrier Global belongs to the Zacks Building Products - Air Conditioner and Heating industry. Another stock from the same industry, Comfort Systems (FIX), has gained 6.3% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026.
Comfort Systems reported revenues of $3.27 billion in the last reported quarter, representing a year-over-year change of +50.3%. EPS of $12.53 for the same period compares with $6.53 a year ago.
Comfort Systems is expected to post earnings of $12.06 per share for the current quarter, representing a year-over-year change of +46.2%. Over the last 30 days, the Zacks Consensus Estimate has changed +1.5%.
Comfort Systems has a Zacks Rank #1 (Strong Buy) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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This article originally published on Zacks Investment Research (zacks.com).