“Carrier Global Corporation delivered fourth-quarter adjusted EPS of $0.34, missing analyst expectations, on net sales of $4.84 billion that fell 6 percent year-over-year amid ongoing residential weakness and distributor destocking. Organic sales declined 9 percent, yet commercial HVAC orders surged nearly 50 percent on data center wins, transportation refrigeration posted double-digit growth, and free cash flow reached $909 million. For 2026, the company guides to approximately $2.80 in adjusted EPS and $22 billion in revenue, anticipating flat-to-low-single-digit organic growth as commercial HVAC and aftermarket businesses deliver another year of double-digit expansion despite a planned divestiture headwind.”
Q4 2025 Performance Overview
Carrier Global Corporation reported net sales of $4.837 billion for the fourth quarter, a 6 percent decline from $5.148 billion in the prior-year period. Organic sales fell 9 percent, partially offset by a 3 percent positive impact from foreign currency translation. The top-line pressure stemmed primarily from continued softness in North American residential and light commercial markets, compounded by distributor inventory destocking.
GAAP operating profit dropped sharply to $101 million from $774 million in Q4 2024, largely reflecting the absence of a prior-year gain on the sale of the commercial refrigeration business. Adjusted operating profit came in at $455 million, down 33 percent, translating to an adjusted operating margin of 9.4 percent versus 13.2 percent a year ago. The margin contraction reflected lower volumes in residential-heavy segments, partially mitigated by productivity gains and cost discipline.
Adjusted earnings per share from continuing operations totaled $0.34, compared with $0.54 in the year-ago quarter. GAAP EPS from continuing operations was $0.03. Net earnings from continuing operations stood at $28 million.
Segment Results Highlight Divergence
Performance varied markedly across Carrier’s four reporting segments:
| Segment | Q4 2025 Sales ($M) | YoY Change | Organic Change | Segment Op. Profit ($M) | Margin |
|---|---|---|---|---|---|
| Climate Solutions Americas (CSA) | 1,935 | -17% | -17% | 168 | 8.7% |
| Climate Solutions Europe (CSE) | 1,332 | +6% | -2% | 120 | 9.0% |
| Climate Solutions Asia Pacific, Middle East & Africa (CSAME) | 798 | -9% | -9% | 95 | 11.9% |
| Climate Solutions Transportation (CST) | 772 | +13% | +10% | 112 | 14.5% |
CSA, the largest segment, faced the steepest decline as residential volumes dropped 38 percent and light commercial fell 20 percent, only partially offset by double-digit growth in commercial HVAC. CSE benefited from productivity and cost synergies, expanding margins by 260 basis points despite modest organic sales softness. CSAME saw margin improvement on strong execution amid lower China residential demand. CST delivered the strongest growth, with nearly 50 percent expansion in container refrigeration.
Full-Year 2025 Recap
For the full year, Carrier generated sales of $21.75 billion, down 3 percent reported and 1 percent organically. Global commercial HVAC and aftermarket businesses each posted double-digit growth, underscoring the company’s successful pivot toward higher-margin, resilient end-markets. Adjusted operating margin reached 15.1 percent. Adjusted EPS totaled $2.59, while GAAP EPS from continuing operations was $1.69.
Carrier returned approximately $3.7 billion to shareholders through $0.8 billion in dividends and $2.9 billion in share repurchases, demonstrating strong capital allocation discipline.
Cash Generation Remains Robust
Fourth-quarter net cash from operating activities reached $1.040 billion. After capital expenditures of $131 million, free cash flow totaled $909 million. Full-year free cash flow was $2.121 billion, reflecting disciplined working-capital management and the benefit of lower inventory levels.
2026 Outlook: Commercial Strength to Offset Residential Headwinds
Carrier provided full-year 2026 guidance incorporating the anticipated divestiture of its Riello business, expected to close by the end of the first quarter and create a roughly $350 million revenue headwind.
Reported sales approximately $22 billion (flat to low-single-digit growth)
Organic sales flat to low-single-digit growth
Adjusted operating profit approximately $3.4 billion
Adjusted EPS approximately $2.80
Free cash flow approximately $2 billion
Share repurchases approximately $1.5 billion
Management highlighted expectations for a sixth consecutive year of double-digit growth in global commercial HVAC, fueled by data center demand and an expanding backlog. Aftermarket operations are also projected to deliver another year of double-digit expansion. Residential and light commercial markets, particularly in the Americas, are expected to remain challenging.
Strategic Positioning and Market Context
Carrier continues to emphasize its leadership in intelligent climate and energy solutions. The company’s focus on data center cooling, digitally enabled services, and productivity initiatives has created a resilient growth platform that is increasingly insulated from cyclical residential volatility. Order momentum in commercial HVAC and transportation refrigeration, combined with a strong balance sheet and ongoing share repurchases, positions Carrier to navigate near-term macro uncertainty while capitalizing on secular tailwinds in sustainable cooling and energy efficiency.
Disclaimer This is a news and information report based on publicly available financial results. It does not constitute investment advice, trading recommendations, or professional financial guidance. Readers should consult qualified advisors and review official SEC filings before making any investment decisions.
