01—Abstract
Summary
Summary of the 10-Q filed July 28, 2026. Cited figures are marked; the original filing is the authoritative source.
Carrier Global Corp. (CARR) reported its second-quarter 2026 financial results, showcasing a modest increase in net sales driven by organic growth and foreign currency translation, reaching $6.4 billiona for the quarter and $11.7 billion for the first six months.
However, profitability faced pressure, with a decrease in gross margin and operating profit year-over-year for both periods. This decline was attributed to higher input costs, tariffs, and unfavorable business mix, partially offset by productivity initiatives and pricing actions. The company also incurred a significant impairment charge of $46 millionb related to the Riello business, which was sold in July 2026.
Despite the margin pressures, Carrier continues to invest in strategic areas and manage its portfolio. The company's balance sheet remains solid, with a net debt to net capitalization ratio of 44%c as of June 30, 2026.
Cash flows from operations were robust, supporting investments and shareholder returns, including significant share repurchases totaling $748 milliond in the first six months of 2026 and $400 million in dividends. The company also announced its intention to sell its Noresco business, indicating ongoing portfolio optimization.
02—Key points
Key Highlights
- Net sales increased 4% to $6.4 billion for Q2 2026 and 3% to $11.7 billion for the first six months of 2026, driven by organic growth and foreign currency translation.
- Gross margin decreased by 2% to $1.7 billion in Q2 2026 and by 8% to $3.0 billion in the first six months, with gross margin as a percentage of net sales declining by 170 bps and 300 bps, respectively, due to higher input costs and unfavorable mix.
- Operating profit for Q2 2026 decreased by 9% to $825 million, and for the first six months decreased by 29% to $1.1 billion, reflecting increased operating expenses and the impact of a $46 million impairment charge on the Riello business.
- The company repurchased $748 million of its common stock in the first six months of 2026 and paid $400 million in dividends, demonstrating a commitment to shareholder returns.
- The sale of the Riello business was completed on July 1, 2026, following an impairment charge of $46 million in Q2 2026. The sale of the Noresco business is expected to close in Q3 2026.
- Cash flow from continuing operations was $953 million for the first six months of 2026, an increase from the prior year, driven by favorable working capital changes.
- The company maintained a strong liquidity position with $1.3 billion in cash and cash equivalents as of June 30, 2026.
03—Questions
Frequently Asked Questions
What was the primary driver for the decrease in gross margin?
The primary drivers for the decrease in gross margin were higher input costs, including the impact of tariffs, and an unfavorable business mix. These were partially offset by higher volumes in certain end-markets and productivity initiatives.
What is the significance of the Riello business impairment charge?
Carrier Global recognized a $46 million impairment charge in the second quarter of 2026 related to its Riello business, which was sold on July 1, 2026. This charge negatively impacted the reported operating profit for the quarter and the first six months.
How is Carrier Global managing its debt and liquidity?
Carrier Global maintains a solid liquidity position with $1.3 billion in cash and cash equivalents as of June 30, 2026. The company has access to a $2.5 billion revolving credit facility and utilizes commercial paper. The net debt to net capitalization ratio was 44% as of June 30, 2026. Operating cash flows are the primary source of liquidity, which are used to fund operations, capital expenditures, and shareholder returns.
What is the company's strategy regarding portfolio management?
Carrier Global is actively managing its business portfolio to meet customer needs and drive profitable growth. This includes ongoing discussions and evaluations for potential acquisitions, divestitures, joint ventures, and equity investments. The recent sale of the Riello business and the planned sale of the Noresco business are examples of this strategic portfolio optimization.
04—Continue