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Carrier Posts Upbeat Q2 Results; Approves $1.75B Share Buyback Program
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Carrier Posts Upbeat Q2 Results; Approves $1.75B Share Buyback Program

Carrier Global (CARR) has reported strong Q2 results on the back of higher volume and productivity witnessed during the quarter. Following the news, shares of the global provider of HVAC, refrigeration, fire, security and building automation technologies rallied 4.5% on Thursday.

The company reported adjusted earnings of $0.64 per share for the quarter, above the consensus estimate of $0.54 per share. Also, bottom line compares favorably with $0.33 per share reported last year.

Revenues stood at $5.4 billion, up 37% from the same quarter last year. Also, the figure surpassed the Street’s expectations of $4.9 billion. Notably, this growth was driven by a 40% rise in product sales.

Operating profit in Q2 came in at $821 million, up 72.5% year-over-year. Also, capital expenditure worth $79 million was incurred during the quarter, and free cash flow stood at $482 million. (See Carrier stock charts on TipRanks)

Chairman & CEO of Carrier David Gitlin said, “We are making targeted organic and inorganic investments to further enhance our differentiation and deliver long-term value to customers and shareowners.”

Guidance Lifted

Strong performance in the first half of 2021 has made the company raise its 2021 outlook. It expects sales growth to be in the range of 14% to 16%, up from 7% to 10% previously expected.

Adjusted operating margin is likely to be more than 13.5%. Moreover, adjusted earnings per share is anticipated to be between $2.10 and $2.20, up from the earlier guidance of $1.95 to $2.05.

Share Buyback Announced

Alongside Q2 results, Carrier’s board of directors approved a $1.75 billion stock repurchase program, which took the total authorization to $2 billion.

Repurchases will be undertaken at the company’s discretion in the open market or through one or more other public or private transactions. 

Street Says Buy

Following the results, Goldman Sachs analyst Joe Ritchie reiterated a Buy rating on the stock and raised the price target to $63 from $55. The new price target implies 16.8% upside potential.

Consensus among analysts is a Strong Buy based on 8 Buys and 2 Holds. The average Carrier price target stands at $56.33, implying 4.4% upside potential.

TipRanks data shows that financial blogger opinions are 100% Bullish on CARR, compared to the sector average of 69%.

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