Carrier Global: A Tale of Mixed Earnings and Soaring Stock

Carrier Global (NYSE:CARR) reported its fourth quarter earnings on February 11, 2025, with sales of $5.1 billion, up 19% compared to the same period in 2023. However, the company's sales fell short of analyst estimates of $5.32 billion, leading to a 6.1% surge in the stock price. This apparent contradiction begs the question: what factors contributed to the discrepancy between reported sales and analyst estimates, and how might these factors impact future performance?

Organic growth was a key driver of Carrier Global's strong financial performance in 2024. The company achieved 6% organic growth in the fourth quarter and 3% organic growth for the full year. This organic growth was driven by various segments, with the HVAC segment leading the way. Americas sales in the HVAC segment were up high-teens organically, driven by continued strength in Commercial and North America Residential, both up double-digits. However, organic growth in the Refrigeration segment was down 6%, mostly driven by declines in North America truck and trailer.

Carrier Global's strategic focus on organic growth and acquisitions, such as the integration of Viessmann Climate Solutions, has significantly contributed to its long-term financial outlook. The acquisition of Viessmann Climate Solutions in 2024 provided the company with a more comprehensive and differentiated global portfolio in the HVAC industry. This acquisition contributed to the company's adjusted operating profit, which increased by 65% in the fourth quarter of 2024 compared to the same period in 2023. Additionally, the acquisition of Viessmann Climate Solutions helped Carrier Global expand its presence in the European market, which accounted for 21.4% of the company's net sales in 2024.



Carrier Global's strong financial performance in 2024 was also driven by its portfolio transformation, which resulted in total divestiture proceeds of over $10 billion. This transformation allowed the company to focus on its core businesses and improve its overall profitability. The company's total divestiture proceeds from this transformation exceeded $10 billion, which has been reinvested into growth opportunities and shareholder returns.

In conclusion, Carrier Global's robust financial performance in 2024 was driven by several key factors, including organic growth, acquisitions, and portfolio transformation. Despite the discrepancy between reported sales and analyst estimates in the fourth quarter, the company's strong adjusted EPS growth and operating margin expansion suggest that these trends are sustainable. As the company projects accelerated organic growth in 2025, supported by secular tailwinds, continued innovation, and double-digit aftermarket growth, investors should remain optimistic about Carrier Global's long-term prospects. However, it is essential to monitor the company's progress closely and consider the potential impact of market conditions, strategic initiatives, and operational excellence on its future performance.