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Stock Analysis on Net

Carrier Global Corp. (NYSE:CARR)

This company has been moved to the archive! The financial data has not been updated since April 26, 2023.

Common-Size Income Statement

Carrier Global Corp., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2022 Dec 31, 2021 Dec 31, 2020
Product sales 89.37 83.51 82.19
Service sales 10.63 16.49 17.81
Net sales 100.00% 100.00% 100.00%
Cost of products sold -65.31 -59.67 -58.35
Cost of services sold -7.93 -11.32 -12.39
Cost of products and services sold -73.24% -70.99% -70.73%
Gross margin 26.76% 29.01% 29.27%
Research and development -2.64 -2.44 -2.40
Selling, general and administrative -12.30 -15.14 -16.15
Equity method investment net earnings 1.28 1.21 1.19
Transaction gains 0.00 0.00 6.43
Impairment charge on minority-owned joint venture investments 0.00 -0.01 -0.41
Other 9.01 0.20 -0.26
Other income (expense), net 9.01% 0.19% 5.76%
Operating profit 22.11% 12.83% 17.66%
Non-service pension benefit (expense) -0.02 0.30 0.34
Interest expense -1.48 -1.55 -1.71
Interest income 0.41 0.06 0.06
Interest income (expense), net -1.07% -1.48% -1.65%
Income from operations before income taxes 21.02% 11.64% 16.36%
Income tax expense -3.47 -3.39 -4.86
Net income from operations 17.55% 8.25% 11.49%
Non-controlling interest in subsidiaries’ earnings from operations -0.24 -0.18 -0.14
Net income attributable to common shareowners 17.31% 8.07% 11.35%

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).

The financial performance between 2020 and 2022 is characterized by a significant shift in revenue composition, a contraction in gross margins, and a subsequent recovery in net profitability driven by operational efficiencies and non-operating income.

Revenue Composition
A structural shift in the revenue mix is evident, as product sales increased from 82.19% of net sales in 2020 to 89.37% by 2022. This trend is mirrored by a corresponding decline in service sales, which dropped from 17.81% to 10.63% over the same three-year period.
Gross Profitability and Cost Trends
Gross margin experienced a steady decline, falling from 29.27% in 2020 to 26.76% in 2022. This erosion is primarily linked to the rising cost of products sold, which increased from 58.35% to 65.31% of net sales. While the cost of services sold as a percentage of sales decreased from 12.39% to 7.93%, this was insufficient to offset the increased costs associated with the growing proportion of product sales.
Operating Expense Efficiency
A notable improvement in operational efficiency is observed within selling, general, and administrative (SG&A) expenses, which decreased from 16.15% of net sales in 2020 to 12.30% in 2022. Research and development spending remained relatively stable, showing only a slight increase from 2.40% to 2.64%.
Operating Profit and Non-Operating Gains
Operating profit displayed volatility, dipping to 12.83% in 2021 before rising to a period high of 22.11% in 2022. This late-period surge was heavily influenced by "Other income (expense), net," which jumped to 9.01% of net sales in 2022 compared to 0.19% in 2021 and 5.76% in 2020.
Bottom-Line Performance
Net income attributable to common shareowners reached 17.31% of net sales in 2022, marking a significant increase from 8.07% in 2021. This improvement was supported by a narrowing net interest expense, which improved from -1.65% in 2020 to -1.07% in 2022, and a relatively stable income tax expense range between 3.39% and 4.86%.

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