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Carrier Global (CARR) Up 7.2% Since Last Earnings Report: Can It Continue?
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It has been about a month since the last earnings report for Carrier Global (CARR - Free Report) . Shares have added about 7.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Carrier Global due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Carrier Q4 Earnings Beat Estimates, Revenues In Line
Carrier Global reported fourth-quarter 2023 adjusted earnings of 53 cents per share, which surpassed the Zacks Consensus Estimate by 3.92%. The figure increased 32.5% year over year.
Net sales of $5.10 billion missed the Zacks Consensus Estimate by 2.82% but remained unchanged year over year.
Product sales (87% of net sales) of $4.44 billion decreased 1.9% year over year. Service sales (13% of net sales) of $661 million were up 14.4% year over year.
Quarter Details
HVAC revenues of $3.29 billion accounted for 64.5% of net sales. The figure lagged the Zacks Consensus Estimate by 5.33% and declined 0.7% year over year.
Refrigeration revenues of $1.02 billion were up 8.6% year over year and accounted for 20.1% of net sales. The figure missed the consensus mark by 6.94%.
Fire & Security revenues of $909 million were down 5.3% year over year and contributed 17.8% of net sales. The reported figure lagged the consensus mark by 0.3%.
Research & development (R&D) expenses increased 14.1% year over year to $170 million. As a percentage of revenues, R&D expenses declined 10 basis points (bps) year over year.
Selling, general & administrative (SG&A) expenses grew 42.8% year over year to $961 million. As a percentage of revenues, SG&A expenses increased 570 bps year over year.
Adjusted operating margin expanded 130 bps on a year-over-year basis to 12.4%.
Adjusted operating margin of the HVAC segment expanded 250 bps year over year to 12.1%.
The Refrigeration segment reported an adjusted operating margin of 10.5%, which contracted 150 bps year over year.
Fire & Security’s adjusted operating margin was 14.2%, which contracted 30 bps year over year.
Balance Sheet
As of Dec 31, 2023, Carrier had cash and cash equivalents of $10.02 billion compared with $3.9 billion as of Sep 30, 2023.
Total debt (including the current portion) as of Dec 31, 2023, was $14.29 billion compared with $8.79 billion as of Sep 30, 2023.
In the reported quarter, Carrier generated $1.06 million in cash from operations, up from $1.04 billion in the prior quarter.
Capital expenditure was $233 million in the fourth quarter of 2023. Free cash flow was $829 million for the reported quarter.
Guidance
For 2024, Carrier expects sales of more than $26.5 billion. The adjusted operating margin is expected between 15% and 15.5%.
CARR anticipates adjusted earnings between $2.80 per share and $2.90 per share.
The company expects a free cash flow of roughly $0.7 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Carrier Global has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Carrier Global has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Carrier Global belongs to the Zacks Electronics - Miscellaneous Products industry. Another stock from the same industry, KLA (KLAC - Free Report) , has gained 17.5% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
KLA reported revenues of $2.49 billion in the last reported quarter, representing a year-over-year change of -16.7%. EPS of $6.16 for the same period compares with $7.38 a year ago.
KLA is expected to post earnings of $5.26 per share for the current quarter, representing a year-over-year change of -4.2%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for KLA. Also, the stock has a VGM Score of F.
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Carrier Global (CARR) Up 7.2% Since Last Earnings Report: Can It Continue?
It has been about a month since the last earnings report for Carrier Global (CARR - Free Report) . Shares have added about 7.2% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Carrier Global due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
Carrier Q4 Earnings Beat Estimates, Revenues In Line
Carrier Global reported fourth-quarter 2023 adjusted earnings of 53 cents per share, which surpassed the Zacks Consensus Estimate by 3.92%. The figure increased 32.5% year over year.
Net sales of $5.10 billion missed the Zacks Consensus Estimate by 2.82% but remained unchanged year over year.
Product sales (87% of net sales) of $4.44 billion decreased 1.9% year over year. Service sales (13% of net sales) of $661 million were up 14.4% year over year.
Quarter Details
HVAC revenues of $3.29 billion accounted for 64.5% of net sales. The figure lagged the Zacks Consensus Estimate by 5.33% and declined 0.7% year over year.
Refrigeration revenues of $1.02 billion were up 8.6% year over year and accounted for 20.1% of net sales. The figure missed the consensus mark by 6.94%.
Fire & Security revenues of $909 million were down 5.3% year over year and contributed 17.8% of net sales. The reported figure lagged the consensus mark by 0.3%.
Research & development (R&D) expenses increased 14.1% year over year to $170 million. As a percentage of revenues, R&D expenses declined 10 basis points (bps) year over year.
Selling, general & administrative (SG&A) expenses grew 42.8% year over year to $961 million. As a percentage of revenues, SG&A expenses increased 570 bps year over year.
Adjusted operating margin expanded 130 bps on a year-over-year basis to 12.4%.
Adjusted operating margin of the HVAC segment expanded 250 bps year over year to 12.1%.
The Refrigeration segment reported an adjusted operating margin of 10.5%, which contracted 150 bps year over year.
Fire & Security’s adjusted operating margin was 14.2%, which contracted 30 bps year over year.
Balance Sheet
As of Dec 31, 2023, Carrier had cash and cash equivalents of $10.02 billion compared with $3.9 billion as of Sep 30, 2023.
Total debt (including the current portion) as of Dec 31, 2023, was $14.29 billion compared with $8.79 billion as of Sep 30, 2023.
In the reported quarter, Carrier generated $1.06 million in cash from operations, up from $1.04 billion in the prior quarter.
Capital expenditure was $233 million in the fourth quarter of 2023. Free cash flow was $829 million for the reported quarter.
Guidance
For 2024, Carrier expects sales of more than $26.5 billion. The adjusted operating margin is expected between 15% and 15.5%.
CARR anticipates adjusted earnings between $2.80 per share and $2.90 per share.
The company expects a free cash flow of roughly $0.7 billion.
How Have Estimates Been Moving Since Then?
It turns out, fresh estimates have trended downward during the past month.
VGM Scores
At this time, Carrier Global has a strong Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Notably, Carrier Global has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry Player
Carrier Global belongs to the Zacks Electronics - Miscellaneous Products industry. Another stock from the same industry, KLA (KLAC - Free Report) , has gained 17.5% over the past month. More than a month has passed since the company reported results for the quarter ended December 2023.
KLA reported revenues of $2.49 billion in the last reported quarter, representing a year-over-year change of -16.7%. EPS of $6.16 for the same period compares with $7.38 a year ago.
KLA is expected to post earnings of $5.26 per share for the current quarter, representing a year-over-year change of -4.2%. Over the last 30 days, the Zacks Consensus Estimate remained unchanged.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for KLA. Also, the stock has a VGM Score of F.