Stock Analysis on Net
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).

Revenue Composition
Over the three-year period, the proportion of product sales as a percentage of net sales increased significantly from 82.19% in 2020 to 89.37% in 2022. Conversely, service sales declined from 17.81% to 10.63%, indicating a shift in revenue composition favoring product sales more strongly by 2022.
Cost Structure
The cost of products sold as a percentage of net sales rose from -58.35% in 2020 to -65.31% in 2022, reflecting increased product cost pressure. Similarly, the cost of services sold declined slightly from -12.39% to -7.93%. The combined cost of products and services sold moved upward from -70.73% to -73.24%, indicating a generally higher cost base relative to sales over time.
Profitability Margins
Gross margin decreased from 29.27% in 2020 to 26.76% in 2022, suggesting a contraction in profitability at the gross level despite growth in product sales proportion. Operating profit showed a variable trend, starting at 17.66% in 2020, dipping to 12.83% in 2021, and then rebounding sharply to 22.11% in 2022, reflecting improved operational efficiency or other income contributions. Net income attributable to common shareholders followed a similar pattern, falling from 11.35% in 2020 to 8.07% in 2021, then increasing markedly to 17.31% in 2022.
Operating Expenses and Other Income
Research and development expenses as a percentage of net sales slightly increased over the period from -2.40% to -2.64%. Selling, general and administrative expenses decreased substantially from -16.15% in 2020 to -12.30% in 2022, suggesting cost management or efficiency gains in these areas. Other income (expense), net, including transaction gains and impairment charges, showed marked variability. Notably, other income rose significantly to 9.01% by 2022, which may have materially contributed to the improved operating profit that year.
Investment and Financial Items
Equity method investment net earnings showed a slight upward trend from 1.19% to 1.28%. Interest expense decreased from -1.71% to -1.48%, while interest income increased from 0.06% to 0.41%, resulting in improved net interest income or lower net interest expense. These changes suggest an improved financial cost position over the period.
Tax and Minority Interest
Income tax expense as a percentage of net sales decreased from -4.86% in 2020 to around -3.47% in 2022, indicating a lower effective tax burden relative to sales. The non-controlling interest in subsidiaries' earnings from operations increased in magnitude slightly from -0.14% to -0.24%, which indicates a growing share of profits attributed to minority interests.
Summary
The data reflect a shift towards higher product sales with increased associated costs but a decreasing share of service sales. Margins, particularly gross margin, experienced some contraction, yet operating profit and net income showed resilience, especially by 2022. Improved cost control in SG&A expenses and substantial increases in other income likely supported this profitability recovery. Financial expenses trended downward, enhancing net income outcomes. Overall, the trends suggest improved operational and financial management leading to stronger earnings performance in the latest year despite some margin pressures.