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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
Quarterly Data

Carrier Global Corp., common-size consolidated income statement (quarterly data)

Microsoft Excel
3 months ended: Mar 31, 2023 Dec 31, 2022 Sep 30, 2022 Jun 30, 2022 Mar 31, 2022 Dec 31, 2021 Sep 30, 2021 Jun 30, 2021 Mar 31, 2021 Dec 31, 2020 Sep 30, 2020 Jun 30, 2020 Mar 31, 2020
Product sales 88.87 88.68 89.73 89.46 89.60 82.91 84.44 84.26 82.23 81.24 83.83 82.45 80.94
Service sales 11.13 11.32 10.27 10.54 10.40 17.09 15.56 15.74 17.77 18.76 16.17 17.55 19.06
Net sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Cost of products sold -65.58 -66.74 -65.47 -64.54 -64.42 -61.74 -59.39 -59.47 -57.97 -59.23 -57.66 -58.99 -57.54
Cost of services sold -8.29 -8.83 -7.43 -7.70 -7.80 -11.65 -10.63 -10.77 -12.36 -12.80 -11.14 -12.29 -13.61
Cost of products and services sold -73.87% -75.57% -72.90% -72.23% -72.22% -73.39% -70.02% -70.24% -70.33% -72.03% -68.79% -71.27% -71.14%
Gross margin 26.13% 24.43% 27.10% 27.77% 27.78% 26.61% 29.98% 29.76% 29.67% 27.97% 31.21% 28.73% 28.86%
Research and development -2.64 -2.92 -2.62 -2.34 -2.69 -2.61 -2.30 -2.30 -2.58 -2.76 -2.00 -2.37 -2.52
Selling, general and administrative -13.67 -13.18 -11.45 -11.78 -12.91 -15.90 -14.00 -14.94 -15.81 -17.63 -13.61 -16.04 -17.80
Equity method investment net earnings 0.83 0.78 1.16 1.94 1.25 0.94 1.42 1.60 0.81 1.28 1.24 1.44 0.75
Other income (expense), net -0.13 -0.63 13.81 0.13 23.89 -0.02 0.41 0.28 0.06 18.24 4.78 -0.63 -1.18
Operating profit 10.53% 8.48% 27.99% 15.72% 37.32% 9.02% 15.50% 14.39% 12.15% 27.10% 21.61% 11.13% 8.10%
Non-service pension benefit (expense) 0.00 -0.04 0.00 -0.02 -0.02 0.19 0.26 0.35 0.38 0.28 0.32 0.35 0.44
Interest income (expense), net -0.87 -1.06 -1.03 -1.17 -1.03 -1.32 -1.39 -1.31 -1.98 -1.78 -1.76 -2.04 -0.95
Income from operations before income taxes 9.65% 7.38% 26.97% 14.53% 36.27% 7.89% 14.38% 13.44% 10.56% 25.60% 20.17% 9.44% 7.59%
Income tax expense -2.31 -1.94 -2.53 -3.26 -6.47 -1.42 -5.39 -4.30 -2.21 -6.29 -5.22 -2.67 -4.96
Net income from operations 7.34% 5.45% 24.44% 11.26% 29.80% 6.47% 8.99% 9.14% 8.34% 19.31% 14.95% 6.77% 2.62%
Non-controlling interest in subsidiaries’ earnings from operations -0.27 -0.16 -0.37 -0.27 -0.17 -0.16 -0.21 -0.18 -0.17 -0.07 -0.14 -0.20 -0.15
Net income attributable to common shareowners 7.07% 5.29% 24.07% 11.00% 29.63% 6.31% 8.78% 8.95% 8.17% 19.24% 14.81% 6.57% 2.47%

Based on: 10-Q (reporting date: 2023-03-31), 10-K (reporting date: 2022-12-31), 10-Q (reporting date: 2022-09-30), 10-Q (reporting date: 2022-06-30), 10-Q (reporting date: 2022-03-31), 10-K (reporting date: 2021-12-31), 10-Q (reporting date: 2021-09-30), 10-Q (reporting date: 2021-06-30), 10-Q (reporting date: 2021-03-31), 10-K (reporting date: 2020-12-31), 10-Q (reporting date: 2020-09-30), 10-Q (reporting date: 2020-06-30), 10-Q (reporting date: 2020-03-31).

An analysis of the common-size income statement from March 2020 to March 2023 reveals a strategic shift in revenue composition and fluctuating profitability margins. There is a notable transition toward product-based revenue at the expense of service-based income, accompanied by increased cost pressures on product sales and improvements in operational expense management.

Revenue Composition and Mix
A consistent upward trend is observed in product sales, which grew from 80.94% of net sales in March 2020 to 88.87% by March 2023. Conversely, service sales declined from 19.06% to 11.13% over the same period. This indicates a significant shift in the business model toward product distribution over service provision.
Gross Margin and Cost of Sales
Gross margins have experienced volatility, peaking at 31.21% in September 2020 before reaching a low of 24.43% in December 2022. This contraction is primarily driven by the rising cost of products sold, which increased from 57.54% of net sales in early 2020 to a high of 66.74% in December 2022. While the cost of services sold as a percentage of net sales decreased from 13.61% to 8.29%, this was largely a function of the shrinking share of service revenue rather than an increase in service efficiency.
Operating Expense Trends
Selling, general, and administrative (SG&A) expenses demonstrate a clear downward trend, improving from 17.80% of net sales in March 2020 to 13.67% in March 2023. This suggests an increase in operational efficiency or a successful effort to scale the organization. Research and development expenditures have remained relatively stable, fluctuating within a narrow band between 2.00% and 2.92% of net sales.
Operating Profit and Non-Operating Volatility
Operating profit percentages exhibit extreme volatility, largely influenced by "Other income (expense), net." While organic operating margins fluctuated, the inclusion of other income led to significant spikes, most notably in March 2022, where operating profit reached 37.32% of net sales due to a 23.89% contribution from other income. Outside of these anomalous spikes, the underlying operating profit has shown a tendency to normalize between 8% and 15%.
Net Income and Bottom-Line Performance
Net income attributable to common shareowners mirrors the volatility of the operating profit. The highest profitability was recorded in March 2022 at 29.63% of net sales, whereas the lowest periods occurred in early 2020 (2.47%) and late 2022 (5.29%). The variance in net income suggests that bottom-line results have been heavily impacted by non-recurring items rather than steady operational growth.

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