10-QPeriod: Q1 FY2022

CARRIER GLOBAL Corp Quarterly Report for Q1 Ended Mar 31, 2022

Filed April 28, 2022For Securities:CARR

Summary

Carrier Global Corp reported a net sales of $4.65 billion for the first quarter of 2022, a slight decrease of 1% compared to the prior year, primarily impacted by divestitures and foreign currency translation, partially offset by a strong 10% organic growth driven by pricing improvements and higher volumes, particularly in the HVAC segment. The company saw a significant increase in operating profit to $1.74 billion, up from $571 million in the prior year, largely due to the substantial gain from the sale of the Chubb Fire & Security business. Despite this, gross margins decreased by 7% to $1.29 billion, impacted by the divestiture of Chubb, increased commodity and component costs, and higher freight expenses. The company continues to navigate supply chain challenges and inflationary pressures, implementing pricing actions and investing in supply chain resilience.

Financial Highlights

49 data points
Beta

Revenue

$4.65B

Net Income

$1.39B

29.8% Net Margin

EPS (Diluted)

$1.58

Total Assets

$24.19B

Cash & Equivalents

$3.60B

Free Cash Flow

-$202.00M

Financial Statements
Beta
Revenue$4.65B
R&D Expenses$125.00M
SG&A Expenses$601.00M
Operating Expenses$4.09B
Operating Income$1.74B
Net Income$1.39B
EPS (Basic)$1.62
EPS (Diluted)$1.58
Shares Outstanding (Basic)853.30M
Shares Outstanding (Diluted)874.10M

Key Highlights

  • 1Net sales for the quarter were $4.65 billion, a 1% decrease year-over-year, with organic sales up 10% driven by HVAC segment strength.
  • 2Operating profit surged to $1.74 billion, a significant increase from $571 million in the prior year, primarily due to a $1.1 billion gain from the sale of the Chubb Fire & Security business.
  • 3Gross margin declined by 7% to $1.29 billion, with gross margin as a percentage of net sales decreasing to 27.8% from 29.7% due to divestitures and rising costs.
  • 4The company repurchased approximately $741 million of its common stock during the quarter, demonstrating a commitment to returning capital to shareholders.
  • 5Carrier is strategically managing its portfolio, including the recent agreement to acquire a majority stake in Toshiba Carrier Corporation (TCC) for approximately $900 million.
  • 6Despite ongoing supply chain challenges and inflationary pressures, the company is implementing pricing strategies and investing in supply chain resilience.
  • 7Cash and cash equivalents increased to $3.6 billion from $3.0 billion at the end of the prior year, providing strong liquidity.

Frequently Asked Questions

The substantial increase in operating profit was primarily driven by the gain of $1.1 billion recognized from the sale of the Chubb Fire & Security business on January 3, 2022.

Carrier is experiencing increased costs for commodities and components, as well as transportation delays, which have negatively impacted sales and results. The company is mitigating these effects through pricing actions, supply chain investments, and working with suppliers.

Carrier is focused on a balanced capital allocation strategy that includes funding organic and inorganic growth initiatives (such as the TCC acquisition), returning capital to shareholders through share repurchases and dividends, and maintaining strong liquidity.

The divestiture resulted in a significant gain recognized in the current quarter and has removed Chubb's historical financial results from the current period's comparisons, leading to a decrease in reported net sales and a different segment composition.