Carrier Global (CARR) Q1 2026 earnings summary

Executive summary

• Q1 2026 net sales rose 2% year-over-year to $5.34 billion, with organic sales down 1% but aided by foreign currency gains.

• Orders increased 11%, led by Commercial HVAC up 35% and data center orders up over 500%; backlog rose approximately 15% sequentially and year-over-year.

• Adjusted operating profit was $594 million, down 30% year-over-year; adjusted EPS was $0.57, down 12%.

• Free cash flow was negative at ($15) million, reflecting normal seasonality but better than expected.

• Approximately $500 million was returned to shareholders via dividends and share repurchases.

Financial highlights

• Q1 2026 reported sales: $5.3 billion; adjusted operating profit: $594 million; adjusted EPS: $0.57, all down year-over-year.

• Operating profit dropped 59% to $259 million; gross margin declined to 23.3% from 27.7% year-over-year.

• Adjusted operating margin fell to 11.1% from 16.3% year-over-year.

• Free cash flow was ($15) million, down from $420 million in Q1 2025.

• Net debt increased to $10.8 billion as of March 31, 2026.

Outlook and guidance

• Full-year 2026 guidance reaffirmed: sales of ~$22 billion, adjusted operating profit of ~$3.4 billion, adjusted EPS of ~$2.80, and free cash flow of ~$2 billion.

• Organic sales expected to be flat to up low single digits, with a 1% FX benefit and a $250 million revenue headwind from the Riello exit.

• Q2 revenue expected just below $6 billion, with operating margin ~17% and adjusted EPS ~$0.80.

• Riello divestiture expected to close by end of Q2 2026, with $430 million in gross proceeds.

• Expect to offset input cost headwinds (tariffs, fuel, raw materials) dollar-for-dollar with pricing and cost actions.