10-QPeriod: Q1 FY2021

CARRIER GLOBAL Corp Quarterly Report for Q1 Ended Mar 31, 2021

Filed April 29, 2021For Securities:CARR

Summary

Carrier Global Corporation (CARR) reported strong financial performance for the first quarter of 2021, demonstrating significant year-over-year growth across key metrics. Net sales increased by 21% to $4.7 billion, driven by a robust 17% organic growth, reflecting improved global end-markets, particularly in the HVAC segment. The company's profitability saw a substantial boost, with operating profit up 81% to $571 million and net income attributable to common shareholders soaring by 300% to $384 million. This strong operational performance, coupled with effective cost containment initiatives and productivity gains, helped offset rising commodity and supply chain costs. The company maintained a healthy liquidity position with $2.6 billion in cash and cash equivalents and demonstrated a commitment to shareholder returns through a new $350 million share repurchase program and a declared dividend. The company's segment performance was strong across the board. HVAC sales grew 27%, driven by residential and commercial demand. Refrigeration sales increased by 24%, benefiting from recovery in transport and commercial sectors. Fire & Security also showed growth with an 8% increase in net sales. Despite the ongoing impact of the COVID-19 pandemic, Carrier Global has successfully navigated the challenging environment, leveraging its diversified portfolio and global presence to deliver impressive results and positive momentum heading into the second quarter.

Financial Highlights

49 data points
Beta

Revenue

$4.70B

Net Income

$384.00M

8.2% Net Margin

EPS (Diluted)

$0.43

Total Assets

$24.87B

Cash & Equivalents

$2.60B

Free Cash Flow

$184.00M

Financial Statements
Beta
Revenue$4.70B
R&D Expenses$121.00M
SG&A Expenses$743.00M
Operating Expenses$4.17B
Operating Income$571.00M
Net Income$384.00M
EPS (Basic)$0.44
EPS (Diluted)$0.43
Shares Outstanding (Basic)869.30M
Shares Outstanding (Diluted)889.80M

Key Highlights

  • 1Net sales increased by 21% to $4.7 billion, with organic sales growing by 17%, indicating strong demand recovery.
  • 2Operating profit surged by 81% to $571 million, driven by higher volumes and operational efficiencies.
  • 3Net income attributable to common shareholders increased by a remarkable 300% to $384 million, translating to diluted EPS of $0.43.
  • 4Gross margin improved to 29.7% from 28.9% in the prior year, reflecting successful cost containment and productivity measures.
  • 5All three business segments (HVAC, Refrigeration, Fire & Security) reported significant year-over-year sales and operating profit growth.
  • 6The company ended the quarter with $2.6 billion in cash and cash equivalents, maintaining a solid liquidity position.
  • 7A new $350 million share repurchase program was authorized in February 2021, and the company repurchased $38 million of stock in Q1.

Frequently Asked Questions

Carrier's net sales increased by 21% to $4.7 billion driven by a 17% organic sales growth. This strong performance was primarily attributed to the recovery and improvement in global end-markets, particularly in the HVAC segment across North America, Europe, and China. The Refrigeration and Fire & Security segments also benefited from improving economic conditions and increased demand compared to the pandemic-impacted first quarter of 2020.

Carrier Global demonstrated strong operational performance, leading to an 81% increase in operating profit. The company achieved this by driving higher sales volumes across all segments, which outpaced operational costs. This was supported by ongoing cost containment initiatives, improved material and factory productivity, and favorable equity method investment earnings. While commodity and supply chain costs did rise, the company's operational efficiencies and pricing actions helped to mitigate these impacts and improve gross margin percentage.

Carrier Global maintains a strong liquidity position, ending the quarter with $2.6 billion in cash and cash equivalents. The company has access to a $2.0 billion revolving credit facility and a commercial paper program, neither of which had outstanding borrowings as of March 31, 2021. The company also returned capital to shareholders by paying $104 million in dividends and repurchasing $38 million of its common stock in the first quarter, with a new $350 million repurchase program authorized, indicating confidence in future performance.

The HVAC segment saw a 27% sales increase, boosted by strong North America residential and commercial demand, along with growth in Europe and China. The Refrigeration segment's sales rose 24%, driven by recovery in transport refrigeration (including for vaccine transport) and commercial refrigeration. The Fire & Security segment experienced an 8% sales increase, with improvements in field service and product sales, particularly in China and Europe, though offset by weaker demand in hospitality and oil/gas sectors.