Carrier Global Q2 Earnings: Margin Pressure and Restructuring Weigh on Profits Despite Revenue Growth
CARR sits 28% above its 52-week low of $50.24.
Summary
Carrier Global's Q2 revenue rose 4% to $6.35B, but operating profit fell 9% as margins contracted. Restructuring costs more than doubled, and the company disclosed new antitrust litigation. The Riello sale closed, and the AFFF settlement process advances.
Key Events · Earnings and Guidance · CARR
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Revenue Up, Profits Down
Q2 net sales grew 4% to $6.35B, but operating profit fell 9% to $825M. Gross margin contracted 170 bps to 27.2%, driven by higher input costs including tariffs and unfavorable mix.
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Restructuring Costs Surge
H1 2026 restructuring costs reached $116M, more than double the $55M in H1 2025. The accrued restructuring reserve stands at $111M, primarily for severance, with most expected to be utilized within 12 months.
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Tax Benefits Flatter Earnings
The effective tax rate fell to 9.4% in H1 2026 from 20.1% a year ago, boosted by a $99M valuation allowance release and an $18M state audit settlement. These one-time items mask underlying profit pressure.
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Portfolio Reshaping Continues
The Riello sale closed on July 1, 2026, with expected gross proceeds of ~$430M. A $46M impairment was recognized in Q2. The Noresco sale is expected to close in Q3 2026.
Analysis · CARR · Technology
Carrier Global's second quarter of 2026 tells a story of diverging trends: revenue climbed 4% to $6.35 billion, yet operating profit slid 9% as gross margins contracted 170 basis points. Higher input costs—including tariffs—and an unfavorable mix are eroding profitability. Restructuring costs surged to $116 million in the first half, more than double the prior year's pace, signaling deeper cost-cutting ahead. The effective tax rate dropped sharply to 9.4% thanks to one-time benefits, which flattered bottom-line EPS. The Riello sale closed in July, bringing in roughly $430 million, while the Noresco divestiture is on deck. A new antitrust lawsuit alleging HVAC price-fixing adds legal uncertainty. Meanwhile, the AFFF settlement inches forward, with court approval for water provider claims expected this quarter. Against a backdrop of a major shareholder selling $750 million in stock just two months ago, these results underscore a company in transition—growing the top line but grappling with cost headwinds and portfolio reshaping.
At the time of this filing, CARR was trading at $64.49 on NYSE in the Technology sector, with a market capitalization of approximately $53.6B. The 52-week trading range was $50.24 to $81.09. This filing was assessed with negative market sentiment and an importance score of 8 out of 10.