Reefer Unit Powers Carrier Global to 55.6% Q4 Profit Hike
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Profits at Carrier Global jumped 55.6% year-over-year in the fourth quarter on the back of higher refrigeration unit sales and improved operating margins.
Palm Beach Gardens, Fla.-based Carrier posted net income of $420 million, or 49 cents per diluted share, in Q4 compared with $270 million, or 32 cents, in the year-ago period, it said Feb. 6.
Carrier’s fourth-quarter sales of $5.102 billion were little changed from $5.105 billion in the prior-year period, it added.
The company’s operating margin in the most recent three-month period was 11.9% compared with 10.9% in the same period a year earlier.
“[Fourth-quarter] earnings were ahead of our expectations and the guide we provided in October, even though reported sales of $5.1 billion were about $150 million lower,” Chief Financial Officer Patrick Goris said during the company’s quarterly analyst call.
Carrier delivered strong full year and fourth quarter 2023 #earnings results with full year sales of $22.1B, up 8% compared to 2022. Read the full release here: https://t.co/dLxVT8JkmY pic.twitter.com/WRHogGLq7x — Carrier (@carrier) February 6, 2024
Sales at the company’s refrigeration unit totaled $1.024 billion in the most recent quarter, up 8.6% compared with $943 million in the year-ago period, it said.
Carrier said the refrigeration unit saw organic sales rise 6% year-over-year in the most recent quarter, driven by growth at its transport refrigeration segment.
Providing more detail on the call, Goris said: “Our global truck and trailer business was up low single digits, with North America and Europe flat and strong growth in Asia.”
The big driver, however, was container refrigeration. “Within transport, refrigeration container was up significantly, around 60%,” Goris said.
However, transport refrigeration orders fell 30% year-over-year in Q4, although the company said it was a “very difficult comparison” for North American truck and trailer segment orders for the period.
During the call, Goris noted that Q4 2022 saw North American truck and trailer orders rise “an exceptional 120%” year-over-year as Carrier opened its 2023 order book.
At Carrier’s largest division, its HVAC unit, sales in Q4 totaled $3.293 billion, down 0.7% from $3.316 billion in the year-ago period.
Executives expressed happiness with the results, and analysts were complimentary too.
Gitlin
“Our fourth-quarter results continue to show Carrier’s ability to perform while transforming with strong operating profit growth and EPS up over 30% compared to the prior year,” CEO David Gitlin said in a statement. “In addition to delivering results ahead of our projections for the year, we completed our game-changing combination with Viessmann Climate Solutions in January and reached definitive agreements to sell both our Global Access Solutions and Commercial Refrigeration businesses for close to $6 billion combined.”
Carrier’s sale of its commercial refrigeration business does not include the Carrier Transicold transport refrigeration operations.
The company’s management team also is anticipating positive developments in 2024. “Looking forward to 2024, our solid backlog levels and sustainability leadership position Carrier for another year of strong financial performance,” Gitlin said.
Prospects for sales growth at Carrier’s refrigeration business are included in that optimism.
“We’re looking at a strong rebound in the container business, both in terms of the market and in terms of share,” Goris said. “So we think that for us, the container business [sales growth] will certainly be well north of double digits.
“For the global truck trailer business, that’s up in the low single-digit range. The North American truck trailer market, if you look at [ACT Research expectations], that market’s down double digits. But remember, last year it was down significantly, and we actually grew last year.”
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Carrier was looking beyond just trailer sales, the company’s top finance executive said, directing analysts to also keep truck volumes, auxiliary power units, pricing and the growing electrification push in mind.
“So even though the market says, I think the market could be down double digits, ACT, I think, is saying 37,000 units this year from 42,500 or so last year. We actually think that we’ll end up probably flattish in both [North American truck and trailer sales], maybe kind of give or take a point or two, and then I would say flattish on the European truck trailer side as well,” Goris said.
European sales are likely to be a percentage point or two lower, but Asia truck and trailer sales will grow, he added.
