Carrier Global Corp. ((CARR)) has held its Q4 earnings call. Read on for the main highlights of the call.
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Carrier Global Corp.’s recent earnings call highlighted a positive sentiment, underscoring robust organic growth and a successful portfolio transformation in 2024. The company noted significant contributions from its commercial HVAC and data center segments. However, it also acknowledged challenges in the residential HVAC market and underperformance from Viessmann, compounded by geopolitical and currency headwinds that pose risks for 2025.
Organic Growth and Earnings Expansion
Carrier reported a 3% organic growth in 2024, driven by global commercial HVAC and aftermarket segments. The company also achieved a 16% growth in adjusted EPS and expanded margins by 180 basis points, showcasing its strong financial performance.
Successful Portfolio Transformation
The company successfully completed its portfolio transformation by integrating Viessmann Climate Solutions and executing strategic divestitures, generating over $10 billion in proceeds. This transformation allowed Carrier to return more than $2.6 billion to shareholders via dividends and share repurchases.
Strong Performance in Data Centers
Carrier’s data center sales are projected to double to $1 billion in 2025, largely due to the Quantum Leap initiative and comprehensive cooling solutions for hyperscalers and colos, which are expected to drive growth in this segment.
Viessmann Revenue Synergies
Carrier anticipates $100 million in revenue synergies from the Viessmann acquisition, leveraging new product introductions and channel expansions to enhance its market position.
Challenges in Residential and Light Commercial HVAC
The earnings call revealed difficulties in the residential and light commercial HVAC sectors, particularly in Europe and China, which have negatively impacted the overall segment performance.
Viessmann Underperformance
Viessmann Climate Solutions did not meet expectations in 2024 due to political and economic uncertainties in Europe, leading to a projection of flat to mid-single-digit decline in market volume for 2025.
Currency and Tariff Headwinds
Carrier faces a $200 million sales headwind from currency translation and potential tariff impacts on imports from China and Mexico, which could affect future financial outcomes.
Forward-Looking Guidance
Looking ahead to 2025, Carrier provided optimistic guidance, expecting mid-single-digit organic growth and continued double-digit growth in aftermarket and global commercial HVAC. The company projects a 17% increase in adjusted EPS and aims for about 100% free cash flow conversion. Plans include repurchasing approximately $3 billion in shares, supported by an anticipated $2.4 to $2.6 billion in free cash flow.
In summary, Carrier Global Corp.’s earnings call conveyed a predominantly positive sentiment with strong growth and strategic advancements. While challenges remain, particularly in the residential HVAC market and with Viessmann’s performance, the company’s forward-looking guidance indicates confidence in continued growth and shareholder value.
