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Carrier's Earnings in Focus as Summer Heats Up

4.8

Andrew R. Michaud

July 31, 2023

As the summer temperatures rise, so does the stock of air-conditioning company Carrier. With expectations high, the market eagerly awaits the company's second-quarter earnings report, scheduled for release on Thursday morning.

Wall Street analysts are predicting earnings of 77 cents per share on sales of $5.8 billion for the quarter. This would represent an improvement from the previous year, when Carrier reported earnings of 69 cents per share from sales of $5.2 billion. The stock has already experienced a significant boost, with a 31% increase year-to-date, outperforming the S&P 500 and Dow Jones Industrial Average which have risen by 19% and 7% respectively.

The recent surge in Carrier's stock price can be attributed to favorable industry conditions. Over the past three months, the stock has soared by 33%, mirroring similar gains in other air-conditioning peers such as Lennox International, whose shares have risen by approximately 30%. The correlation is clear - as the heat intensifies, so does the demand for cooling solutions.

Analysts expect a solid quarter for Carrier and its peers. Tim Wojs, an analyst at Baird, highlighted the positive factors in a recent report. Strong HVAC pricing and low dealer inventories, influenced by supply-chain disruptions in various sectors, are expected to contribute to upside results for the second quarter. Wojs further noted that this could lead to an increase in the company's full-year guidance ranges.

Earlier this year, Carrier management projected that the company would achieve full-year earnings per share of around $2.55 from sales totaling $22 billion. Currently, Wall Street estimates predict slightly higher earnings per share of $2.58 from sales of $22.2 billion.

Given these expectations, Wojs rates Carrier shares as Hold with a $58 price target.

It's evident that as summer temperatures soar, Carrier is poised to reap the benefits. With strong market conditions and positive industry dynamics, the company's second-quarter earnings report is highly anticipated. Investors eagerly await to see if Carrier can deliver on the high expectations set before them.