Heating, ventilation, air conditioning, and refrigeration company Carrier Global (NYSE: CARR) beat Wall Street’s revenue expectations in Q2 CY2026, with sales up 3.9% year on year to $6.35 billion. The company’s full-year revenue guidance of $23 billion at the midpoint came in 3.1% above analysts’ estimates. Its non-GAAP profit of $0.86 per share was 5.2% above analysts’ consensus estimates.

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"We ended the first half with a stronger than expected second quarter, including better sales, adjusted EPS and free cash flow," said 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

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Unfortunately, Carrier Global’s 2.3% annualized revenue growth over the last five years was sluggish. This fell short of our benchmarks and is a rough starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Carrier Global’s annualized revenue growth of 3.6% 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 3.9% but beat Wall Street’s estimates by 5.6%.

Looking ahead, sell-side analysts expect revenue to grow 3.1% over the next 12 months, similar to its two-year rate. This projection doesn’t excite us and indicates its newer products and services will not accelerate its top-line performance yet.

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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 13.1%. 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 11.1 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 Q2, Carrier Global generated an operating margin profit margin of 13%, down 1.8 percentage points year on year. Since Carrier Global’s gross margin decreased more than its operating margin, we can assume its recent inefficiencies were driven more by weaker leverage on its cost of sales rather than increased marketing, R&D, and administrative overhead expenses.

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 weak 3% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.

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 8.4% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q2, Carrier Global reported adjusted EPS of $0.86, down from $0.92 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 5.2%. Over the next 12 months, Wall Street expects Carrier Global’s full-year EPS to grow 22.5% from $2.44 to $2.99.

Key Takeaways from Carrier Global’s Q2 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. Zooming out, we think this quarter featured some important positives. The stock traded up 2.6% to $71.10 immediately following the results.

Indeed, Carrier Global had a rock-solid quarterly earnings result, but is this stock a good investment here? We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).