Carrier Global Q4 Sales Down 6% with Adjusted EPS of $0.34
Carrier Global reported Q4 net sales of $4.84 billion, down 6% year-over-year with organic sales down 9%, while GAAP EPS of $0.03, adjusted EPS of $0.34 and free cash flow of $909 million. The company forecasts flat to low-single-digit organic growth, ~$3.4 billion in adjusted operating profit and ~$2.80 EPS for 2026.
1. Fourth Quarter Revenue and Earnings Pressure
Carrier Global reported Q4 net sales of $4.84 billion, down 6% year-over-year, with organic revenues falling 9%. This decline reflects a 38% drop in residential volumes and a 20% reduction in light commercial demand in the Americas, partially offset by growing commercial HVAC orders. GAAP earnings from continuing operations were $0.03 per share, while adjusted EPS stood at $0.34, a 37% decrease from the prior year’s adjusted $0.54, driven primarily by lower volumes and the absence of a prior-year gain on the sale of the commercial refrigeration unit.
2. Segment-Level Performance Diverges
In Climate Solutions Americas, sales tumbled 17% to $1.94 billion, with segment operating margin contracting 990 basis points to 8.7%. Europe posted a 6% sales increase to $1.33 billion despite a 2% organic dip, boosting margin by 260 basis points to 9.0%. Asia Pacific, Middle East & Africa saw a 9% revenue decline to $798 million but improved operating margin by 100 basis points to 11.9%. Transportation Solutions delivered 13% sales growth to $772 million and expanded margin by 30 basis points to 14.5%, driven by double-digit container unit growth.
3. Strong Cash Generation and Shareholder Returns
Operating cash flow reached $1.04 billion for the quarter, up from $132 million a year ago, thanks to disciplined working-capital management. Capital expenditures totaled $131 million, yielding free cash flow of $909 million. For the full year, Carrier returned approximately $3.7 billion to shareholders, comprising $0.8 billion in dividends and $2.9 billion in share repurchases, underscoring a commitment to capital allocation.
4. 2026 Guidance Reflects Growth Priorities
Looking ahead, the company forecasts flat to low-single-digit organic sales growth on a reported revenue base of roughly $22 billion, accounting for an expected $350 million headwind from the planned divestiture of Riello. Management targets adjusted operating profit of about $3.4 billion, adjusted EPS near $2.80, and free cash flow of approximately $2 billion, alongside up to $1.5 billion in share buybacks, driven by continued double-digit expansion in global commercial HVAC and aftermarket services.