Carrier Global Corp Reports First Quarter 2026 Results: Strong Growth in Commercial HVAC

Chairman & CEO David Gitlin expressed optimism about the company’s performance, stating, "We started the year with better-than-expected sales performance across the portfolio." The company reported a remarkable 35% increase in orders within its global Commercial HVAC business, significantly bolstered by a staggering over 500% increase in data center-related orders. Gitlin emphasized the strong double-digit sequential increase in the Commercial HVAC backlog, bolstering confidence in achieving the company’s sixth consecutive year of double-digit growth in this sector.

Carrier's first-quarter net sales reached $5.34 billion, marking a 2% increase compared to $5.22 billion in the same period last year. However, organic sales experienced a slight decline of 1%, which was offset by a favorable 3% impact from foreign currency translation.

The CSA segment reported a decline in net sales of 3%, down to $2.50 billion from $2.57 billion in Q1 2025. Organic sales also fell by 3%, heavily influenced by a 12% drop in the Residential category. Conversely, Light Commercial and Commercial categories experienced growth, rising by 9% and 1%, respectively. The segment's operating profit decreased by 35%, resulting in an operating margin of 14.9%, down from 22.2% the previous year.

In contrast, the CSE segment demonstrated resilience with an 11% growth in net sales, reaching $1.29 billion compared to $1.17 billion in the prior year. Organic sales remained flat, but segments such as RLC saw low-single-digit growth. However, the operating profit fell by 15%, with a margin of 6.9%, down from 9.0%.

The CSAME segment witnessed a modest 1% increase in net sales, totaling $834 million. Organic sales dipped by 1%, primarily due to challenges in the Chinese market. The segment's operating margin decreased significantly to 9.7%, down from 14.6% the previous year, reflecting the ongoing pressures in the region.

On a more positive note, the CST segment reported a robust 10% increase in net sales, amounting to $713 million, driven by strong growth in the Container market. The organic sales growth of 5% was characterized by a remarkable 38% increase in the Container segment, though it was somewhat offset by declines in Global Truck and Trailer.

Carrier's cash flow situation has shown a concerning trend. The company reported net cash flows from operating activities of $79 million, with capital expenditures reaching $94 million, resulting in a free cash flow of ($15) million, a stark contrast to the $420 million generated in the prior year.

Looking ahead, Carrier reaffirmed its full-year guidance, projecting sales of approximately $22 billion, with organic sales expected to remain flat to increase low-single digits. The company anticipates a revenue headwind of about $250 million from the exit of its Riello operations, which is expected to close by the end of Q2 2026.

Carrier Global Corp's first-quarter results reflect a complex environment with significant growth opportunities in certain segments, particularly Commercial HVAC, while grappling with challenges in others. The reaffirmation of full-year guidance indicates management's confidence in navigating these hurdles. Investors will be keenly watching how the company adapts to this landscape as it aims for continued growth amidst fluctuating market conditions.