Total Net Sales

Down ~16% (from $6,182M to $5,218M)

Total Net Sales declined significantly due to a drop in both product and service sales across key geographies. In Q1 2024, robust contributions from acquisitions and strong organic growth buoyed sales, but in Q1 2025, reduced contributions—especially from regions such as Europe (–29%) and “Other” (–32%)—combined with weaker end‑market demand, lowered the overall sales base. " " " " "

Product Sales

Down ~16% (from $5,542M to $4,652M)

Product Sales fell as demand weakened compared to the previous period, where solid HVAC segment performance (driven by acquisitions and organic gains) had contributed to higher figures. In Q1 2025, lower sales volumes and adverse offsets from divestitures or subdued market conditions led to a steep decline relative to the prior period’s stronger performance. " "

Service Sales

Down ~11% (from $640M to $566M)

Service Sales were lower by about 11%, likely reflecting a reduced service base tied to the lower product sales. In Q1 2024, higher overall sales supported more extensive service revenue, while in the current period a tapering in underlying demand and possibly fewer service contract renewals contributed to the decline. " "

Operating Profit

Up ~26% (from $500M to $629M)

Operating Profit improved markedly by 26% despite lower total revenue. This increase is primarily due to effective cost efficiencies, pricing improvements, and productivity initiatives that expanded margins. The current period also benefited from the absence of prior unfavorable adjustments (like VCS backlog and inventory step‑up amortization) that had weighed on Q1 2024 performance. " "

Net Earnings Attributable to Common Shareowners

Up ~53% (from $269M to $412M)

Net Earnings surged by 53% driven by the improved operating profit, enhanced margins, and beneficial adjustments such as a lower effective tax burden and reduction in diluted shares. While earlier periods saw lower earnings due to heavier expense loads and less favorable tax adjustments, these factors shifted significantly in Q1 2025, contributing to a stronger bottom line. " "

United States Revenue

Down ~8% (from $2,967M to $2,738M)

United States revenue declined modestly by 8%, reflecting a slight dip in domestic demand and competitive pressures. In Q1 2024, the U.S. benefited from robust market conditions and the impact of strategic acquisitions, but current challenges have led to a contraction in this key region’s revenue. " "

Europe Revenue

Down ~29% (from $1,971M to $1,401M)

Europe revenue experienced a steep decline of 29%, primarily due to weakened organic sales resulting from challenging economic conditions, adverse FX impacts, and decreased demand. Compared to Q1 2024, where European markets performed better under more favorable conditions, the current period’s uncertainties and lower customer activity have significantly eroded revenue. " "

Asia Pacific Revenue

Down ~9.5% (from $1,040M to $941M)

Asia Pacific revenue dropped by approximately 9.5%, influenced largely by reduced volumes and weak demand in key markets such as China. Although prior performance benefited from positive contributions in select subregions, current period headwinds and currency effects have dampened overall revenue in the region. " "

Other Revenue

Down ~32% (from $204M to $138M)

Other Revenue was down by 32%, likely reflecting the impact of divestitures or reduced revenue from smaller segments that had previously contributed more significantly. In Q1 2024, these items were bolstered by favorable transactions, but in the current period, their diminished role has had a notable negative impact on this revenue category. " "

Revenue

FY 2025

Expected Total Revenue of $22.5B–$23B "

Reported Sales expected to be slightly above $23B "

raised

Organic Sales Growth

FY 2025

Mid-single digits "

Mid-single digits "

no change

Adjusted Operating Margin Expansion

FY 2025

Expansion by 100 basis points "

Expansion by about 100 basis points "

no change

Adjusted EPS

FY 2025

$2.95–$3.05 "

$3.00–$3.10 " " "

raised

Free Cash Flow

FY 2025

$2.4B–$2.6B "

$2.4B–$2.6B "

no change

Share Repurchases

FY 2025

Target of $3B "

Targeting $3B "

no change

Tariff Impacts & Mitigation Strategies

In Q4 2024, Carrier discussed tariff challenges—highlighting mitigation of China tariffs, uncertainties with Mexican tariffs, and various supply chain and pricing actions. " " " Q3 and Q2 2024 did not cover this topic.

In Q1 2025, Carrier provided detailed insights into a $300 million tariff exposure and outlined a robust mitigation strategy combining supply chain adjustments, localization, dual sourcing, and transparent price increases. " " " "

Consistent focus with refined strategies: Previously managed through supply chain and pricing, now with more targeted actions to offset tariff exposure.

Residential HVAC Market Performance

Q4 2024 showcased a strong recovery in the Americas with recovery in Europe and mixed results in Asia. Q3 and Q2 2024 highlighted steady order growth and regional variations. " " " "

Q1 2025 maintained a similar focus with Americas sales up about 20%, continued recovery expectations in Europe starting Q2, and persistent weakness in China and Southeast Asia. " " "

Stable performance with regional divergence: Americas remain strong; Europe and Asia continue to face headwinds despite growth initiatives.

Commercial & Light Commercial HVAC Performance

Across Q4, Q3, and Q2 2024, Carrier emphasized robust commercial HVAC performance with global order gains and capacity expansion, while the light commercial segment faced pressure in some regions. " " " " "

In Q1 2025, commercial HVAC delivered high teens growth globally (driven partly by data centers, mega projects, etc.), whereas light commercial HVAC underperformed with a ~35% decline, prompting a revised full‐year outlook. " " " "

Divergent trends: Commercial HVAC continues robust growth; light commercial remains challenged, signaling reassessment of market demand in that segment.

Data Center Growth & Capacity Expansion

Q2, Q3, and Q4 2024 consistently featured data center growth with discussions on doubling revenue (from $0.5B to $1B), strategic capacity expansion (e.g., facility expansions and Quantum Leap initiatives), and strong order momentum. " " " "

In Q1 2025, Carrier highlighted record Q1 deliveries (e.g., $250 million in orders) and reaffirmed their capacity expansion strategy, including further investments in innovative liquid cooling and Quantum Leap to drive future growth. " " "

Sustained momentum: Data center initiatives continue to be a key growth driver with consistent capacity investments and innovative product strategies.

Pricing Strategies & Challenges

From Q2 through Q4 2024, Carrier discussed planned annual price increases, transitioning to R-454B units with higher base prices, and the pressure of commodity cost fluctuations and tariff mitigation measures. " " " " "

Q1 2025 reiterated the use of mid-single-digit price increases to offset tariff impacts, emphasizing a structured pricing approach integrated with channel partner collaboration and modest price uplift contributions to organic growth. " " " " "

Persistent and evolving: Consistent execution of pricing strategies to counteract tariffs and transition costs, with evolving challenges based on market dynamics.

Inventory Management & Order Momentum

Q2, Q3, and Q4 2024 featured balanced inventory management with strong sell-out rates, orderly channel pull-ahead activities, and robust organic order momentum across HVAC and refrigeration segments. " " "

In Q1 2025, Carrier noted a seasonal inventory build-up with efforts to rebalance elevated levels, while order momentum remained strong with diverse regional performance across segments. " " " "

Robust and effective: Order momentum remains strong and inventory management continues to be effective despite seasonal fluctuations, underpinning a solid operational base.

Margin Performance & Cost Management

Q2, Q3, and Q4 2024 consistently reported margin expansion driven by operational productivity, cost synergies (including early benefits from Viessmann), and efficient cost management across segments, though integration challenges occasionally pressured margins. " " " " "

In Q1 2025, Carrier delivered a 210 basis point margin expansion driven by strong productivity, pricing improvements, and cost synergies, while also managing tariff-related headwinds and segment-specific challenges. " " " "

Continuous improvement: Ongoing focus on productivity and cost control is offsetting market headwinds, with synergies from acquisitions gradually bolstering margins.

Viessmann Climate Solutions Acquisition Impact

Q2, Q3, and Q4 2024 focused on integration progress, noting both revenue and cost synergy opportunities, margin headwinds in the short term from consolidation, and an evolving impact on the European segments. " " " " "

In Q1 2025, the acquisition continued to be a major theme, with clear revenue and cost synergy targets ($100 million in revenue synergies in 2025, $200 million in cost synergies by 2026) and its mixed impact on the CSE segment, underscoring a long-term strategic play. " " " "

Integration in progress: Early challenges are giving way to tangible synergies; the acquisition remains strategically critical for long-term European growth.

Geopolitical & Regulatory Uncertainty

In Q4 2024, uncertainty in Europe regarding elections, climate policies, and subsidy dynamics was discussed, impacting market volume assumptions and leading to cautious outlooks. " " " Q3 and Q2 2024 did not mention this topic.

Q1 2025 revisited geopolitical themes focusing on tariffs, trade policies, and localization strategies, while also highlighting positive policy moves in Germany (e.g., strong commitment to EU climate goals). " "

Fluctuating focus: Though not uniformly discussed across all periods, regulatory uncertainty remains a key risk factor—its emphasis shifting with external political dynamics.

Technological Innovation & New Product Strategies

Q2, Q3, and Q4 2024 placed heavy emphasis on digital integration, IoT connectivity, integrated systems for data centers, low-GWP products, and AI-driven solutions, showcasing a diversified and proactive product portfolio. " " " " " " "

In Q1 2025, new product launches (e.g., air-cooled commercial heat pumps in Europe, smart app for LYNX Fleet, and advanced liquid cooling via Quantum Leap) along with strategic partnerships (like with Google for HEMS) were highlighted, reinforcing innovation as a core growth engine. " "

High-impact and sustained: Continuous innovation and strategic partnerships are underscored as vital for long-term competitive advantage and market expansion.