Carrier Global Corporation (NYSE: CARR) recently reported financial results for the third quarter of 2020. Carrier is a leading global provider of healthy, safe and sustainable building and cold chain solutions.
“Carrier delivered solid third quarter results driven by very strong North American residential HVAC performance and continued traction on our growth and cost initiatives,” said Carrier President & CEO Dave Gitlin. “Carrier is well-positioned across key trends in healthy, safe and sustainable building and cold chain solutions, and we continue to lean into the opportunity to be the leading one-stop shop.”
Carrier’s third quarter sales of $5 billion were up 4% compared to the prior year, including 3% organic sales growth. The growth was largely driven by record demand in North America residential HVAC, which was up 46% compared to the prior year, and an improved economic climate. Most businesses saw sequential improvement from the second to the third quarter. GAAP operating profit in the quarter of $1.08 billion was up 72% and adjusted operating profit of $867 million was up 6%.
These results benefited from volume growth in the HVAC business, aggressive cost containment, including accelerated savings under Carrier’s three-year run-rate savings target, which has increased from $600 million to $700 million under the renamed Carrier 700 program.
GAAP EPS of $0.84 was helped by the gain on the sale of shares held as an investment. Adjusted EPS was $0.67excluding net nonrecurring and restructuring charges. Net income in the quarter was $741 million, and adjusted net income was $590 million. Net cash flows provided by operating activities were $937 million and capital expenditures were $57 million, resulting in free cash flow of $880 million, representing 119% of net income.
Updated Full-Year 2020 Outlook*
Carrier is raising its full-year 2020 outlook and now anticipates:
- Sales of approximately $17.3 billion, up from a range of $15.5 to $17.0 billion;
- Adjusted operating profit of approximately $2.2 billion, up from a range of $1.8 to $2.0 billion; and
- Free cash flow of approximately $1.5 billion, up from at least $1.1 billion. Carrier’s stronger than expected free cash flow will support plans to reduce the Company’s debt by $1.5 billion in the fourth quarter 2020.
*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.