• Revenue: 2023 sales reached $22.1B, marking an 8% increase over 2022, with organic growth contributing 3%.

• Net Income: GAAP net income stood at $1.3B, with adjusted net income at $2.3B.

• Earnings Per Share (EPS): GAAP EPS rose to $1.58, while adjusted EPS climbed to $2.73, reflecting strong profit growth.

• Free Cash Flow: Free cash flow surged by 53% to $2.1B, demonstrating robust cash generation capabilities.

• Gross Margin: Gross margins improved by 210 basis points compared to the previous year.

• 2024 Outlook: Carrier anticipates sales of ~$26.5B with mid-single digit organic growth and an adjusted EPS of $2.80 - $2.90.

• Warning! GuruFocus has detected 6 Warning Signs with CARR.

On February 6, 2024, Carrier Global Corp (NYSE:CARR) released its 8-K filing, detailing a year of strong financial performance and setting an optimistic outlook for 2024. Carrier, a global leader in intelligent climate and energy solutions, has demonstrated resilience and strategic foresight in navigating market challenges and capitalizing on growth opportunities.

Company Overview

Carrier Global manufactures a wide range of products, including heating, ventilation, and air conditioning (HVAC), refrigeration, and fire and security systems. The company serves both residential and commercial markets, with a sales mix of 60% commercial and 40% residential in its HVAC segment. Carrier's refrigeration segment includes transportation refrigeration and supply chain monitoring, while its fire and security business offers fire detection and suppression, as well as access controls and intrusion detection products. In a significant strategic move, Carrier announced plans to divest its fire and security and commercial refrigeration businesses and has also announced the acquisition of Germany-based Viessmann for approximately $13 billion.

Financial Performance and Challenges

Carrier's financial results for 2023 reflect a company in transformation, achieving an 8% increase in sales and a significant expansion in operating margins. The company's adjusted operating margin expanded by 80 basis points, while GAAP EPS and adjusted EPS saw increases of 53% and 33%, respectively. Despite flat organic sales growth in the fourth quarter, Carrier managed to offset declines in North America Residential & Light Commercial HVAC sales with growth in Commercial HVAC globally. The Refrigeration segment also saw a return to growth, with organic sales up 6%.

However, Carrier faced challenges, including a 1% decline in HVAC segment sales and a 1% drop in Fire and Security organic sales. These challenges underscore the importance of Carrier's strategic decisions to divest certain businesses and focus on areas with stronger growth prospects.