Heating, ventilation, air conditioning, and refrigeration company Carrier Global (NYSE: CARR) announced better-than-expected revenue in Q1 CY2026, with sales up 2.4% year on year to $5.34 billion. The company expects the full year’s revenue to be around $22 billion, close to analysts’ estimates. Its non-GAAP profit of $0.57 per share was 12.1% above analysts’ consensus estimates.

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"We started the year with better-than-expected sales performance across the portfolio," said Carrier Chairman & CEO David Gitlin.

Company Overview

Founded by the inventor of air conditioning, Carrier Global (NYSE: CARR) manufactures heating, ventilation, air conditioning, and refrigeration products.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Regrettably, Carrier Global’s sales grew at a sluggish 3.7% compounded annual growth rate over the last five years. This was below our standard for the industrials sector and is a rough starting point for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Carrier Global’s annualized revenue growth of 5% over the last two years is above its five-year trend, which is encouraging.

We can dig further into the company’s sales dynamics by analyzing its organic revenue, which strips out one-time events like acquisitions and currency fluctuations that don’t accurately reflect its fundamentals. Over the last two years, Carrier Global’s organic revenue was flat. Because this number is lower than its two-year revenue growth, we can see that some mixture of acquisitions and foreign exchange rates boosted its headline results.

This quarter, Carrier Global reported modest year-on-year revenue growth of 2.4% but beat Wall Street’s estimates by 6.8%.

Looking ahead, sell-side analysts expect revenue to grow 1.1% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will face some demand challenges.

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Operating Margin

Carrier Global has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 13.2%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Analyzing the trend in its profitability, Carrier Global’s operating margin decreased by 10.3 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

In Q1, Carrier Global generated an operating margin profit margin of 4.8%, down 7.2 percentage points year on year. Since Carrier Global’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.

Carrier Global’s EPS grew at 6.9% compounded annual growth rate over the last five years. This performance was better than its revenue growth but doesn’t tell us much about its business quality because its operating margin improvement was less than peers.

We can take a deeper look into Carrier Global’s earnings to better understand the drivers of its performance. A five-year view shows that Carrier Global has repurchased its stock, shrinking its share count by 5.3%. This tells us its EPS outperformed its revenue not because of increased operational efficiency but financial engineering, as buybacks boost per share earnings.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Carrier Global, its two-year annual EPS declines of 6% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q1, Carrier Global reported adjusted EPS of $0.57, down from $0.65 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Carrier Global’s full-year EPS of $2.50 to grow 11.4%.

Key Takeaways from Carrier Global’s Q1 Results

We were impressed by how significantly Carrier Global blew past analysts’ organic revenue expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. On the other hand, its operating income missed Wall Street’s estimates. Overall, this print was mixed but still had some key positives. The stock traded up 2% to $63 immediately after reporting.

Is Carrier Global an attractive investment opportunity at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).