Carrier Global Corporation (NYSE:CARR) reported financial results for the second quarter of 2020. Carrier is a leading global provider of innovative heating, ventilating and air conditioning (HVAC), refrigeration, fire, security and building automation technologies.
“Our second quarter results exceeded our expectations, and our team continued to perform well in a very challenging environment,” said Carrier President & CEO Dave Gitlin. “Importantly, we remain focused on executing our strategic priorities. The COVID pandemic has underscored the critical role of buildings in public health, so we moved quickly to roll out our Healthy Buildings Program, which provides advanced solutions to help deliver healthier, safer, and more efficient indoor environments.”
Gitlin added, “We were pleased with our order strength in June, particularly in North America. Although the global economic environment remains uncertain, we continue to focus on our strategic growth initiatives of growing our core business, increasing product extensions and geographic coverage, and building our services and digital business.”
Second Quarter Results
Carrier’s second quarter sales of $4.0 billion were down 20% compared to last year and down 19% organically. The decline was largely driven by the impact from the COVID-19 pandemic across all businesses. Carrier saw demand improve as the second quarter progressed and economic activity resumed.
GAAP operating profit in the quarter of $442 million was down 45%, and adjusted operating profit of $476 millionwas down 42%. These results benefited by Carrier’s aggressive cost containment and the acceleration of Carrier 600. GAAP EPS was $0.30 and adjusted EPS was $0.33 after excluding net nonrecurring and restructuring charges. Net income in the quarter was $261 million and included $25 million of net nonrecurring and restructuring charges. Net cash flows provided by operating activities were $509 million and capital expenditures were $46 million, resulting in free cash flow of $463 million, representing 177% of net income.
Updated Full-Year 2020 Outlook*
On May 8, 2020, Carrier provided ranges for the most reasonable scenarios for full-year 2020 performance given the economic uncertainty associated with COVID-19. With the first half completed, Carrier has revised the low-end of its prior 2020 outlook and now anticipates a full-year outlook that reflects partially restoring strategic investments and capital spending in the second-half of 2020:
- Sales of $15.5 to $17.0 billion, up from $15.0 to $17.0 billion
- Adjusted operating profit of $1.8 to $2.0 billion, up from $1.7 to $2.0 billion
- Free cash flow of at least $1.1 billion, up from at least $1.0 billion
*Note: When we provide expectations for adjusted operating profit and free cash flow on a forward-looking basis, a reconciliation of the differences between the non-GAAP expectations and the corresponding GAAP measures generally is not available without unreasonable effort. See “Use and Definitions of Non-GAAP Financial Measures” below for additional information.