Carrier Global (CARR) investor relations material

Executive summary

• Q3 sales rose 12% to $6.263B, with 15% organic growth; adjusted operating profit increased 33% to $1.091B and adjusted EPS rose 30% to $0.87.

• Orders rose ~35%, Commercial HVAC orders ~60% and data center orders ~300%; backlog exceeded $8.5B, up ~60% YoY, excluding minimum-volume commitments.

• A $3.1B Climate Solutions Europe goodwill impairment drove a $2.540B net loss; FY2026 sales guidance increased to $23.8B-$24.0B amid persistent input-cost and tariff pressures.

Financial highlights

• Q3 sales were $6.263B versus $5.579B; 15% organic growth was partly offset by a 3-point net headwind from acquisitions and divestitures, with FX flat.

• Adjusted operating margin expanded 260 bps to 17.4%; adjusted EPS rose 30% to $0.87, or ~15% growth excluding IEEPA refunds.

• Q3 operating cash flow was $813M and free cash flow was $674M; nine-month free cash flow reached $1.469B.

• Q3 net loss was $2.540B, including a $3.1B goodwill impairment; adjusted continuing-operations earnings were $713M.

• Q3 included a $133M benefit from probable IEEPA tariff refunds, recorded primarily as lower cost of products sold.

Outlook and guidance

• FY2026 sales guidance increased to $23.8B-$24.0B, with ~10% organic growth; adjusted operating profit is expected at ~$3.5B.

• FY2026 adjusted EPS guidance is $2.85-$2.90, including a $0.10 IEEPA refund benefit net of an approximately $0.02 non-controlling-interest impact.

• FY2026 free cash flow guidance remains ~$2B and planned share repurchases are ~$1.5B; CSA full-year operating margin outlook is ~19%.

• Guidance absorbs $550M-$600M in unexpected incremental input costs through pricing, productivity, volume and mix; full-year input-cost headwinds are ~$800M.

• Management targets double-digit EPS growth in 2027; inflationary pressure is expected to carry into 2027, with no early-year margin snapback expected.