As Carrier Global Corp (NYSE: CARR), a leader in intelligent climate and energy solutions, announces its third-quarter financial results for 2025, the company exhibits a complex tapestry of performance metrics. In this report, we delve into Carrier's earnings, revenue breakdown across segments, and key strategic movements affecting its future trajectory.
Carrier Global Corp Earnings
In the third quarter of 2025, Carrier saw its sales decline to $5.6 billion, a 7% decrease from the prior year. This drop is largely attributed to an organic sales decline of 4% and a 4% headwind from net divestitures, specifically the sale of its Commercial Refrigeration segment in the fourth quarter of 2024. However, a 1% tailwind from favorable foreign currency exchange rates provided a slight buffer.
The company's GAAP operating profit stood at $539 million, marking a 29% decrease compared to last year, heavily influenced by weaker residential markets in the Americas and distributor inventory adjustments. On an adjusted basis, operating profit came in at $823 million, which was a 21% drop driven primarily by reduced volume in Carrier's Climate Solutions Americas (CSA) Residential sector.
Earnings per share (EPS) followed a similar trend, with GAAP EPS at $0.47, falling by 24%, and adjusted EPS at $0.67, down 13% year-over-year. These declines reflect the broader challenges in operating profit, with some offset from a lower tax rate and a reduced share count.
Key Financial Metrics
| Metric | Q3 2025 | YoY Change |
|---|---|---|
| Total Revenue ($B) | 5.6 | (7%) |
| GAAP EPS ($) | 0.47 | (24%) |
| Adjusted EPS ($) | 0.67 | (13%) |
| Operating Profit ($M) | 539 | (29%) |
| Adjusted Operating Profit ($M) | 823 | (21%) |
Revenue Breakdown
The company's revenues were affected differently across its major segments. Here's an insightful breakdown that captures these variances:
| Segment | Segment Sales Change (%) | Organic Sales Change (%) |
|---|---|---|
| CSA | (8%) | (8%) |
| CSE | 4% | (3%) |
| CSAME | (1%) | (2%) |
| CST | (20%) | 6% |
Segment Analysis
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Climate Solutions Americas (CSA): This segment experienced an 8% sales decline, driven by strong Commercial HVAC growth in the Americas at 30%, which was overshadowed by a significant 30% drop in Residential sales. Light commercial sales were also down by 4%. The decline resulted in a steep operating margin decrease by 560 basis points.
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Climate Solutions Europe (CSE): Despite a surface-level increase in sales by 4%, the segment witnessed underlying organic sales shrink by 3%, with all subdivisions (Residential, Light Commercial, and Commercial) experiencing decreases in sales volume. However, operational efficiencies achieved some cost synergy, decreasing margin erosion to 110 basis points.
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Climate Solutions Asia Pacific, Middle East & Africa (CSAME): This segment saw sales decrease by 1%, attributed mainly to the underperformance in China’s Residential and Light Commercial arenas. India and the Middle East remained bright spots, maintaining strong growth. The operating margin decreased by 100 basis points.
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Climate Solutions Transportation (CST): The divestiture of Commercial Refrigeration led to a dramatic 20% drop in sales. However, organic sales increased by 6% through a booming 50% growth in the Container domain, somewhat impeded by mid-single-digit declines in Global Truck and Trailer sales. This segment improved its operating margin by 80 basis points thanks to the exit from Commercial Refrigeration operations.
Key Developments
Among the quarter's significant highlights is Carrier's robust aftermarket growth and a strong pipeline and backlog presence in the commercial HVAC space. The movement in share count reflected in its achievement of returning $3 billion to shareholders year-to-date, $2.4 billion of which through share repurchases, helping buffer the decline in EPS. Furthermore, the approval of a $5 billion share repurchase authorization underscores the strength of Carrier’s capital strategy and its confidence in future profitability.
Comments from Company Officers
David Gitlin, Carrier's Chairman & CEO, provided a reaffirming perspective on Carrier's financial posture, stating, "Our team drove continued double-digit aftermarket growth and strong performance in Commercial HVAC, particularly in the Americas. While Residential posted weak results, our cost reduction actions and a strong data center pipeline pave the way for earnings growth in 2026."
Dividends and Share Repurchases
Carrier's impressive $3 billion capital return to shareholders year-to-date, including $2.4 billion dedicated to share repurchases, along with the recent $5 billion share repurchase authorization, illustrate the company’s commitment to adding shareholder value through aggressive capital management strategies.
Carrier Global Corp Stock Forecast
In the realm of stock projections, considering Carrier’s diversified portfolio performance and substantial strategic initiatives like cost reduction and share repurchases, the prospects remain cautiously optimistic. Factors like strong aftermarket performance and the promising pipeline in commercial HVAC position the company attractively. Short-term stock volatility may persist due to residential market pressures. Therefore, fundamental analysis suggests a potential high for CARR stock at around $48, with a low potentially aligning with broader market fluctuations near $39.
Carrier Global Corp's current financial landscape reflects both challenges and opportunities, paving a meticulously strategic path for future growth and shareholder value creation. As the climate and energy solutions industry adapts to technological and economic shifts, Carrier's resilience, innovation, and strategic foresight will drive its ambitious objectives.
