Carrier sales rise 12 per cent as a goodwill charge drives a loss
Carrier increased third-quarter sales to 6.263 billion dollars and expanded its adjusted operating margin. A 3.1 billion dollar noncash goodwill impairment in its European business pushed reported results into a loss. The climate-control company also reported higher orders and a backlog above 8.5 billion dollars, while tariff refunds supported adjusted profit.
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Sales and adjusted profit increase
Carrier, the climate-control equipment company, reported third-quarter sales of 6.263 billion dollars, up 12 per cent from a year earlier. Organic sales increased 15 per cent, with divestitures reducing reported growth by 3 per cent. Its results included a 3.1 billion dollar goodwill impairment associated with the European climate business.[1], [2]
Adjusted operating profit reached 1.091 billion dollars, against 823 million dollars a year earlier. The adjusted operating margin widened to 17.4 per cent from 14.8 per cent. Carrier attributed the improvement chiefly to higher volumes and favourable pricing, partly offset by input costs and tariffs.[1]
European impairment weighs on reported earnings
The noncash goodwill charge accompanied an operating loss of 2.273 billion dollars, compared with operating profit of 539 million dollars a year earlier. Continuing operations generated a net loss of 2.593 billion dollars. Adjusted net earnings were 713 million dollars, with adjusted earnings of 0.87 dollars per share against a reported loss of 3.16 dollars per share.[1]
Refunds under the International Emergency Economic Powers Act added approximately 130 million dollars to operating profit. Their contribution to adjusted earnings was approximately 0.10 dollars per share. Operating cash flow totalled 813 million dollars and free cash flow 674 million dollars.[1]
Orders lift the backlog above 8.5 billion dollars
Backlog exceeded 8.5 billion dollars. Orders excluding the NORESCO business rose approximately 35 per cent, commercial climate orders about 60 per cent and data-centre orders about 300 per cent. Americas climate sales increased 24 per cent; Europe grew 3 per cent, while transportation climate sales fell 3 per cent. Dividends and repurchases returned approximately 600 million dollars to shareholders.[1]
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