Yahoo Finance Carrier Global Corp (CARR) Q1 2024 Earnings: Surpasses Revenue Forecasts with Strategic Acquisitions
Reported Revenue: $6.2 billion, a 17% increase year-over-year, surpassing the estimate of $6.277 billion.
Adjusted EPS: $0.62, significantly exceeding the estimated $0.51.
Net Income: Reported at $269 million, falling short of the estimated $457.31 million.
GAAP Operating Margin: Decreased by 240 basis points year-over-year, indicating a reduction in profitability.
Adjusted Operating Margin: Expanded by 280 basis points, reflecting improved operational efficiency.
Free Cash Flow: Reported a negative $64 million, consistent with seasonal patterns.
Full-Year Guidance: Maintained adjusted EPS guidance at $2.80 - $2.90, despite additional headwinds; adjusted operating margin guidance increased to approximately 15.5%.
On April 25, 2024, Carrier Global Corp (NYSE:CARR) released its 8-K filing, announcing a strong start to the year with significant revenue growth and strategic advancements. The company reported a 17% increase in net sales, reaching $6.2 billion, surpassing the estimated $6.28 billion. This growth includes a 2% organic increase and a notable 16% contribution from the recent acquisition of Viessmann Climate Solutions, slightly offset by a 1% impact from divestitures.
Company Overview
Carrier Global manufactures a diverse range of products in heating, ventilation, air conditioning (HVAC), refrigeration, and fire and security sectors. The HVAC segment, which constitutes a mix of 60% commercial and 40% residential services, showed mixed results with strong commercial performance offsetting a slight decline in residential sales. In April 2023, Carrier announced plans to divest its fire and security and commercial refrigeration businesses, aiming to streamline operations and focus on core areas. The acquisition of Germany-based Viessmann for approximately $13 billion marks a significant expansion, poised to transform Carrier's market position.
Financial Highlights and Challenges
Carrier's adjusted earnings per share (EPS) stood at $0.62, comfortably exceeding analyst expectations of $0.51 per share. However, GAAP EPS was reported at $0.29, reflecting costs associated with acquisitions and other adjustments. The adjusted operating margin expanded by 280 basis points, showcasing strong productivity and effective cost management despite the challenges posed by strategic divestitures and acquisition-related expenses.
The company's financial strategy remains robust, with Carrier maintaining its full-year 2024 adjusted EPS guidance in the range of $2.80 to $2.90, aligning with analyst forecasts. Additionally, Carrier has revised its full-year adjusted operating margin guidance upwards to approximately 15.5%, reflecting confidence in its operational efficiency and cost control measures.
Detailed Financial Analysis
Carrier's balance sheet remains healthy with significant liquidity. As of March 31, 2024, the company reported $1.3 billion in cash and cash equivalents, a decrease from $10 billion at the end of 2023, largely due to the acquisition of Viessmann. Total assets increased to $40.8 billion from $32.8 billion, bolstered by the integration of acquired assets.
Despite the positive revenue and profit figures, Carrier reported a free cash outflow of $64 million, consistent with its seasonal working capital pattern. This outflow is expected to improve as the company progresses through its fiscal year, particularly with the planned resumption of share repurchases in 2024, funded by the net proceeds from its business divestitures.
Operational and Strategic Developments
Carrier's strategic divestitures are on track, with significant progress reported towards completing these transactions. The company expects these moves, along with its acquisition strategy, to enhance its focus on long-term sustainability trends and market leadership in intelligent climate solutions.
Overall, Carrier's first-quarter results demonstrate a solid start to 2024, underpinned by strategic acquisitions and operational efficiency. The company's focus on aligning its portfolio with sustainable and technologically advanced solutions is expected to drive continued growth and shareholder value.
For more detailed information, investors and stakeholders are encouraged to review the full earnings report and financial statements available through Carrier's investor relations website.
Explore the complete 8-K earnings release (here) from Carrier Global Corp for further details.
This article first appeared on GuruFocus.
