Carrier Global 2025 Q2 Earnings Net Income Drops 73.3%

Carrier Global (CARR) reported its fiscal 2025 Q2 earnings on Jul 29th, 2025. The company experienced a 3% increase in total revenue, reaching $6.11 billion, although this fell short of analyst estimates. Adjusted earnings per share (EPS) exceeded expectations at $0.92, surpassing the analyst estimate of $0.80, indicating a 26% increase from the previous year. Despite the positive revenue growth, the company reaffirmed its guidance for the full year, projecting an adjusted EPS range of $3.00 to $3.10.

Revenue

Carrier Global's revenue for 2025 Q2 saw a 3% increase to $6.11 billion from the previous year's $5.93 billion. Climate Solutions Americas led with $3.25 billion, followed by Climate Solutions Europe at $1.25 billion. The Climate Solutions Asia Pacific, Middle East & Africa segment achieved $882 million, and Climate Solutions Transportation recorded $726 million, contributing to the total segment revenue.

Earnings/Net Income

Carrier Global's EPS fell by 73.4% to $0.69 in 2025 Q2, compared to $2.59 in 2024 Q2. The company's net income also saw a significant decline, dropping 73.3% to $633 million from $2.37 billion in the previous year. The steep decline in EPS reflects challenges in maintaining profitability.

Post-Earnings Price Action Review

The strategy of buying CARR shares following an earnings beat and holding for 30 days has yielded impressive results historically. This approach has generated a 93.27% return, markedly outperforming the benchmark return of 41.76%. The excess return of 51.51% highlights the impact of focusing on earnings beats to drive substantial gains. Additionally, the strategy's Sharpe ratio of 0.62, coupled with a maximum drawdown of 0.00%, indicates a low-risk profile relative to returns, making it a robust option for investors seeking growth with minimal volatility. This strategy's success underscores the importance of capitalizing on positive earnings surprises in the market.

CEO Commentary

David L. Gitlin, Chairman & CEO, expressed pride in the strong quarter, highlighting a 6% organic growth driven by a remarkable 45% increase in commercial HVAC in the Americas. He noted that the company is on track to double data center revenues to $1 billion this year, with a significant backlog. Gitlin emphasized that productivity improvements and product differentiation are central to their strategy, leading to a 130 basis point expansion in adjusted operating margins. He conveyed optimism about sustaining growth, stating, "I am confident that we will do so again in the second half of 2025 and beyond."

Guidance

Carrier Global reaffirms its guidance for mid-single-digit organic sales growth and approximately 20% adjusted EPS growth for the year, targeting an adjusted EPS range of $3.00 to $3.10. The company maintains expectations for free cash flow between $2.4 billion and $2.6 billion and plans to repurchase about $3 billion worth of shares in 2025. For Q3, sales are expected to be around $6 billion, with mid-single-digit organic growth, while Q4 EPS is anticipated to be up approximately 20% year-over-year, reflecting productivity benefits and cost actions.

Additional News

In recent developments, Carrier Global has been actively engaging in share repurchase activities, with plans to buy back approximately $3 billion worth of shares in 2025. This strategic move aims to enhance shareholder value and optimize the company's capital structure. Additionally, Carrier continues to focus on its portfolio transformation, aligning its business segments to better reflect its strategic objectives and increase transparency for investors. The company has also maintained its commitment to sustainability and innovation, leading initiatives in climate solutions and energy efficiency across its operations worldwide. These efforts underscore Carrier's dedication to growth and its strategic priorities for the coming year.