Analyst Note| Brian Bernard, CFA, CPA |
Carrier's first-quarter revenue surged 21% year over year (17% organic) to $4.7 billion, 8% above FactSet consensus, driven by strong growth across all three segments. Based on our industry research and competitor Lennox's first-quarter results, we were expecting strong residential heating, ventilating, and air conditioning sales; however, Carrier's residential HVAC sales, which increased 48% year over year, exceeded our expectations. Commercial HVAC sales rebounded by a midteens percentage, and the consolidated HVAC segment realized 27% revenue growth (25% organic). We don't think the recent surge in residential HVAC demand is sustainable, and we expect sales will begin to normalize this year. However, we anticipate elevated commercial HVAC sales for the foreseeable future, driven by heightened demand for more energy-efficient systems that deliver better air quality.