Summary
Carrier Global Corporation (CARR) reported its first quarterly results as an independent public company for the period ending March 31, 2020. The company experienced a significant year-over-year decline in net sales, down 10% to $3.89 billion from $4.32 billion in the prior year's quarter. This decline was attributed primarily to organic sales decreases across all three segments (HVAC, Refrigeration, and Fire & Security), exacerbated by the emerging COVID-19 pandemic which disrupted global supply chains, reduced demand, and led to temporary facility closures. Net income attributable to common shareholders fell sharply to $96 million ($0.11 per diluted share) from $400 million ($0.46 per diluted share) in the first quarter of 2019. This decrease was impacted by lower sales volumes, a non-cash impairment charge of $71 million on a joint venture investment, and significant separation-related costs. Despite these challenges, Carrier emphasized its proactive measures to preserve liquidity and manage cash flows, believing it has sufficient liquidity to withstand the expected impact of COVID-19. The company also completed substantial debt financing during the quarter in preparation for its separation from United Technologies Corporation.
Financial Highlights
49 data points| Revenue | $3.89B |
| R&D Expenses | $98.00M |
| SG&A Expenses | $692.00M |
| Operating Expenses | $3.56B |
| Operating Income | $315.00M |
| Interest Expense | $31.00M |
| Net Income | $96.00M |
| EPS (Basic) | $0.11 |
| EPS (Diluted) | $0.11 |
| Shares Outstanding (Basic) | 866.20M |
| Shares Outstanding (Diluted) | 866.20M |
Key Highlights
- 1Net sales decreased by 10% to $3.89 billion in Q1 2020 compared to $4.32 billion in Q1 2019, largely due to the impact of COVID-19 and weaker demand.
- 2Net income attributable to common shareholders significantly declined to $96 million ($0.11 EPS) from $400 million ($0.46 EPS) year-over-year.
- 3The company incurred a $71 million non-cash impairment charge on a minority-owned joint venture investment.
- 4Carrier completed significant financing activities, issuing $9.25 billion in notes and drawing $1.75 billion on a term loan, primarily to fund a $10.9 billion distribution to UTC in connection with its separation.
- 5The company implemented measures to preserve liquidity and manage cash flow in response to the COVID-19 pandemic, including cost reductions and assessing dividends.
- 6Gross margin improved slightly to 28.9% from 28.4% year-over-year, driven by favorable material productivity and commodities, despite lower volumes.
- 7The Separation from UTC incurred $45 million in pre-Separation costs during the quarter, impacting SG&A expenses.