CARR earnings analysis
What we found in CARR's 10-Q: the parts that mattered, the offsets in the same document, and what the company said about what comes next.
Our reading of the filing · Free to read, no account needed
Carrier delivered Q2 revenue of $6.351 billion, up 4% year over year and 3% organically, while GAAP EPS was $0.60. Profitability weakened year over year: gross margin fell to 27.2% from 28.9%, operating margin declined to 13.0% from 14.8%, and net earnings attributable to common shareowners fell 15% to $501 million. Demand was strongest in Americas residential and light-commercial markets, but tariff/input-cost pressure, unfavorable mix, China weakness and lower segment profits offset the top-line progress; cash generation improved materially in the first half.
The parts that mattered.
Pulled out of the filing itself, with the figures the company reported.
- Revenue grew 4%, led by organic demand
- Q2 net sales rose 4% year over year to $6.351 billion, including 3% organic growth and 1% foreign-currency benefit. Sequentially, sales increased from the implied Q1 level of $5.341 billion derived from six-month sales of $11.692 billion.
- Americas and international sales expanded
- Climate Solutions Americas grew revenue 4% to $3.372 billion, with residential sales up 9% and light-commercial sales up 10%. Europe revenue grew 6% to $1.324 billion, while Asia Pacific, Middle East & Africa grew 4% to $917 million.
- Cash conversion improved despite lower earnings
- Operating cash flow from continuing operations increased to $953 million for the first six months from $752 million a year earlier. After $211 million of capital expenditures, calculated six-month free cash flow was approximately $742 million, with capex equal to 1.8% of six-month sales.
- Liquidity and buyback capacity remain solid
- Liquidity remains substantial, with $1.344 billion of cash and cash equivalents and a $2.5 billion revolving credit facility with zero borrowings at June 30. The company also had $4.584 billion remaining under its share-repurchase authorization after repurchasing 6.940 million shares in Q2.
- Sequential earnings and margins recovered
- Q2 GAAP operating profit of $825 million was up sharply from the implied Q1 level of $258 million, and operating margin improved to 13.0% from an implied 4.8% in Q1. Diluted GAAP EPS was $0.60, versus $0.28 in Q1.
And the other side of it.
The offsets in the same document — the things a summary that only listed the good news would have left out.
- Tariffs and mix drove margin contraction
- Despite 4% sales growth, Q2 gross margin fell 170 basis points year over year to 27.2%, gross profit declined $41 million to $1.728 billion, and operating profit declined 9% to $825 million. Management cites higher input costs, including tariffs, and unfavorable mix.
- Segment profit declined across the portfolio
- All four segments posted lower operating profit: Americas fell $56 million to $823 million, Europe fell $4 million to $95 million, Asia Pacific/MEA fell $27 million to $108 million, and Transportation fell $10 million to $118 million.
- China weakness and Riello impairment pressure results
- China revenue declined 14% in Q2 amid economic challenges affecting demand and price. Separately, the company recorded a $46 million Riello impairment, which contributed to a 25.0% quarterly effective tax rate versus 20.0% a year earlier.
- Leverage and interest costs increased
- Net debt increased $330 million from December 31 to $10.608 billion, while net debt to net capitalization rose to 44% from 42%. Q2 interest expense increased 10% to $126 million, attributed to commercial-paper borrowings.
- No formal risk-factor changes, tariff uncertainty remains
- Item 1A states there were no material changes to risk factors from the 2025 Form 10-K. However, management continues to assess tariff exposure and expects to mitigate 2026 Section 232 tariff effects through supply-chain, cost-reduction and pricing measures.
What they reported.
What the company itself reported, taken out of the document.
- Earnings per share
- $0.6
- Gross margin
- 27.2%
- Operating margin
- 13.0%
- Segment
- Climate Solutions Americas: revenue $3.372 billion (+4% YoY); segment operating profit $823 million (-6% YoY); margin 24.4% versus 27.0%.
- Segment
- Climate Solutions Europe: revenue $1.324 billion (+6% YoY); segment operating profit $95 million (-4% YoY); margin 7.2% versus 7.9%.
- Segment
- Climate Solutions Asia Pacific, Middle East & Africa: revenue $917 million (+4% YoY); segment operating profit $108 million (-20% YoY); margin 11.8% versus 15.3%.
- Segment
- Climate Solutions Transportation: revenue $738 million (+2% YoY); segment operating profit $118 million (-8% YoY); margin 16.0% versus 17.6%.
What they said about what is next.
The 10-Q does not provide explicit quantitative full-year revenue or EPS guidance; outlook was deferred to other company communications. Management states it expects to mitigate the 2026 impact of Section 232 tariffs through supply-chain changes, operating-cost reduction and pricing actions.
The filing reads about the same as the one before it.
What came before.
- 10-Q · April 30, 2026
- Carrier Global Corporation reported Q1 2026 net sales of $5.34 billion, a slight increase from $5.22 billion in Q1 2025 but missed analyst EPS estimates of $0.51, reporting only $0.28 instead. The company faced a sharp…
This is our reading of a public filing, not the filing. Read the original on SEC.gov · Educational only. Nothing here is investment advice.
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