- Company name
- Carrier Global
- Sector
- HVAC & climate equipment
- About
- Carrier makes heating, ventilation and air conditioning (HVAC) equipment, controls and services for homes and commercial buildings. It reports by region: Climate Solutions Americas, Climate Solutions Europe, and Climate Solutions Asia Pacific, Middle East & Africa, plus Climate Solutions Transportation, which makes refrigeration units for containers and trucks. Products include residential and light commercial HVAC, heat pumps, and large chillers for commercial buildings and data centers. Carrier sells through dealers, distributors and directly to building owners and contractors, and it earns recurring revenue from service and parts. Net sales were $6.26 billion in Q3 2026. In 2026, it sold its Riello and NORESCO businesses, so that it focuses on climate products.
- Thesis
- The market doubts that Carrier can keep its higher profit margins while input costs and tariffs rise. In Q2 2026, the adjusted operating margin fell 190 basis points to 17.2%. In Q3 2026, it rose 260 basis points to 17.4%, but about $130 million of this operating profit came from one-time IEEPA tariff refunds. Carrier also took a $3.1 billion goodwill impairment for its European business in Q3 2026, which shows that the Viessmann purchase earns less than Carrier expected. Orders are strong. In Q3 2026, total orders rose about 35%, data center orders about 300%, and the backlog reached a record of more than $8.5 billion. For the gap to close, four things must be true. Carrier must deliver its 2026 outlook of $23.8 to $24.0 billion of sales, adjusted EPS of $2.85 to $2.90 and about $2 billion of free cash flow. The adjusted operating margin must hold without the tariff refunds, as price increases catch up with input costs. The record backlog and the long-term agreements with data center customers must turn into sales in 2027. Residential sales must keep growing after the rise of more than 30% in the Americas in Q3 2026. The Q4 report and the 2027 guidance, expected in late January or early February 2027, are the next test. If these checks pass, the gap can close over the next two to four quarters.
- Risks
- Margins can fall again. The adjusted operating margin fell 190 basis points to 17.2% in Q2 2026. It rose to 17.4% in Q3 2026, but about $130 million of one-time IEEPA tariff refunds helped, while input costs and tariffs still rose. If prices do not catch up, earnings can fall.
Residential HVAC demand depends on housing, interest rates and replacement cycles. Organic sales fell 1% in Q1 2026, then grew 3% in Q2 2026 and 15% in Q3 2026. A new downturn would hit the largest segment.
Section 232 tariffs on steel, aluminum and copper, updated on April 2, 2026, raise input costs. Carrier plans to offset them with supply chain changes, cost cuts and prices, but the effect can come with a delay.
The European business earns less than planned. In Q3 2026, Carrier took a $3.1 billion goodwill impairment for Climate Solutions Europe, which includes the Viessmann business it bought in 2024. Boiler sales fell, although heat pump sales grew.
Much of the order growth comes from data centers. If spending on AI data centers slows, orders and the backlog can fall.
Proposed class actions filed from March 2026 claim that Carrier and other large HVAC makers, such as Trane, Lennox, Daikin and Rheem, fixed prices from 2020. Carrier denies the claims. On October 9, 2026, the makers asked the court to dismiss the cases. A loss can bring damages and legal costs.
- Balance sheet
- Cash: $1.4B
Debt: $11.5B
Net debt: $10.1B
Interest cover: 6.6×
Undrawn credit line: $2.5B, to December 2029
Debt due within 12 months: $1.5B
Ratings: S&P BBB+ (stable outlook), Moody's Baa1 (positive outlook)
Carrier funds itself with senior notes, commercial paper and a Japanese term loan. At September 30, 2026, debt was $11.47 billion: $1.48 billion of short-term borrowings and current long-term debt and $9.99 billion of long-term debt. Short-term borrowings included $185 million of commercial paper, and current debt included $900 million of 2.493% notes due February 15, 2027. Cash and cash equivalents were $1.35 billion, and net debt was $10.12 billion. A $2.5 billion revolving credit facility to December 2029 supports the commercial paper program and was not drawn. Interest cover is GAAP operating profit before the $3.1 billion goodwill impairment, divided by net interest expense, for the first nine months of 2026. The impairment does not use cash. The ratings are as of September 30, 2026. Free cash flow was $674 million in Q3 2026 and $1.47 billion in the first nine months. Carrier expects about $2 billion of free cash flow in 2026 and returned about $600 million to shareholders in Q3 2026 through dividends and buybacks.
As of Sep 30, 2026.
- Checkpoints
- Oct 29, 2026: Q3 2026 earnings: margins and orders. Passed. Watch: An adjusted operating margin that stops falling from a year earlier and the 2026 outlook of about $2.90 adjusted EPS kept pass; a further margin fall or a cut to the outlook fails. Outcome: The adjusted operating margin rose 260 basis points to 17.4%, helped by one-time tariff refunds, and Carrier set 2026 adjusted EPS at $2.85 to $2.90, close to the earlier outlook of about $2.90.
Jan 29, 2027 (estimate): Q4 2026 earnings and 2027 guidance. Pending. Watch: 2026 adjusted EPS of $2.85 to $2.90, free cash flow of about $2 billion and 2027 guidance for EPS growth above the 2026 level without the tariff refunds pass; lower guidance or a lower margin without the refunds fails.
- Recent events
- Nov 2, 2026: Carrier sold $1.5 billion of notes: $750 million of 5.000% notes due 2029 and $750 million of 5.350% notes due 2033. The sale closed on November 4, 2026. Carrier plans to use the money to refinance debt, including the 2.493% notes due February 15, 2027, and for general purposes, which can include repayment of commercial paper.
Oct 29, 2026: Carrier reported Q3 2026 results. Net sales grew 12% to $6.26 billion, and organic sales grew 15%. Orders rose about 35%, with data center orders up about 300%, and the backlog was a record of more than $8.5 billion. Adjusted EPS rose 30% to $0.87, with about $0.10 from IEEPA tariff refunds. The adjusted operating margin rose 260 basis points to 17.4%. A $3.1 billion goodwill impairment for Climate Solutions Europe gave a GAAP loss of $3.16 per share. Carrier raised its 2026 sales outlook to $23.8 to $24.0 billion and set adjusted EPS at $2.85 to $2.90, from about $2.90. It said that it signed long-term agreements worth several billion dollars with minimum volume commitments.
Oct 8, 2026: Carrier said it will report Q3 2026 results on October 29, 2026, with a conference call at 7:30 a.m. ET.
Aug 3, 2026: Carrier completed the sale of its NORESCO energy services business.
Jul 28, 2026: Carrier reported Q2 2026 results. Net sales grew 4% to $6.35 billion, and organic sales grew 3%. Orders rose about 40%, with commercial HVAC up about 65% and data centers up more than 300%. Adjusted EPS fell to $0.86 from $0.92, and the adjusted operating margin fell 190 basis points to 17.2%. Carrier raised its 2026 outlook to about $23 billion of sales and about $2.90 of adjusted EPS.
Jul 24, 2026: Carrier elected Neil Barua, President and CEO of PTC, to its board of directors.
Jul 1, 2026: Carrier completed the sale of its Riello business to Ariston Group. It had expected gross proceeds of about $430 million.
May 18, 2026: Carrier agreed to sell its NORESCO energy services business to Opterra Energy Services, a subsidiary of LS Power.
Apr 30, 2026: Carrier reported Q1 2026 results. Net sales grew 2%, organic sales fell 1% and adjusted EPS was $0.57. Total orders rose 11% and data center orders more than 500%. Carrier kept its full-year outlook.