Carrier Global NYSE:CARR, a climate and energy-solutions company specializing in heating, cooling and building systems, raised its annual outlook Tuesday after data-center orders increased by more than 300%. Total company orders advanced approximately 40%, while commercial heating, ventilation and air-conditioning orders grew approximately 65%. The figures indicate that data-center construction is becoming an increasingly important demand driver for Carrier's cooling and building-infrastructure products.
Second-quarter net sales increased 4% to $6.35 billion, including 3% organic growth. Generally accepted accounting principles operating profit declined 9% to $825 million, while the adjusted operating margin contracted 190 basis points to 17.2%. Carrier reported GAAP earnings of $0.60 per share and adjusted earnings of $0.86 per share. Operating cash flow reached $927 million, and free cash flow totaled $810 million, enabling the company to return approximately $640 million to shareholders through dividends and share repurchases.
Carrier now expects approximately $23 billion in annual sales, roughly $3.5 billion in adjusted operating profit and adjusted earnings of approximately $2.90 per share. Its previous adjusted-earnings forecast was approximately $2.80 per share, according to Reuters. The revised forecast incorporates an estimated $0.05-per-share headwind from the NORESCO exit and costs associated with a new U.S. factory. Carrier's adjusted earnings forecast increased by $0.10 per share despite including the $0.05 headwind, while data-center order growth was more than seven times the companywide rate. Investors may view execution on those orders as an important test of whether demand growth can offset recent margin pressure.