Analysis of Reportable Segments
Carrier Global Corp. operates in 3 segments: HVAC; Refrigeration; and Fire & Security.
Segment Profit Margin
Carrier Global Corp., profit margin by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 19.47% | 15.26% | 25.98% |
| Refrigeration | 12.44% | 11.53% | 10.71% |
| Fire & Security | 45.66% | 12.00% | 11.72% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The segment profit margins across the three reporting units exhibit divergent performance trajectories between 2020 and 2022, characterized by volatility in the HVAC sector, steady growth in Refrigeration, and a significant margin expansion in Fire & Security.
- HVAC Segment
- A period of instability is observed in the HVAC profit margins. After starting at 25.98% in 2020, margins experienced a sharp contraction to 15.26% in 2021. A partial recovery occurred in 2022, with the margin rising to 19.47%, although it remained significantly below the 2020 baseline.
- Refrigeration Segment
- The Refrigeration segment demonstrates a consistent and incremental upward trend. Profit margins increased steadily from 10.71% in 2020 to 11.53% in 2021, reaching 12.44% by the end of 2022, indicating stable operational improvement.
- Fire & Security Segment
- Profit margins for Fire & Security remained relatively flat between 2020 and 2021, moving from 11.72% to 12.00%. However, a substantial surge is evident in 2022, where the margin increased to 45.66%, representing a significant deviation from historical performance.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment Profit Margin: HVAC
Carrier Global Corp.; HVAC; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Operating profit | 2,610) | 1,738) | 2,462) |
| Net sales | 13,408) | 11,390) | 9,478) |
| Segment Profitability Ratio | |||
| Segment profit margin1 | 19.47% | 15.26% | 25.98% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2022 Calculation
Segment profit margin = 100 × Operating profit ÷ Net sales
= 100 × 2,610 ÷ 13,408 = 19.47%
The HVAC segment experienced consistent top-line growth between 2020 and 2022, although this expansion was accompanied by significant volatility in operational profitability and margin efficiency.
- Net Sales Trend
- A steady upward trajectory in net sales is observed, with revenue increasing from US$ 9,478 million in 2020 to US$ 11,390 million in 2021, and further rising to US$ 13,408 million by the end of 2022. This indicates a consistent expansion of the segment's scale over the analyzed period.
- Operating Profit Fluctuations
- Operating profit followed a non-linear pattern, characterized by a notable decline in 2021 to US$ 1,738 million from a 2020 level of US$ 2,462 million. A strong recovery occurred in 2022, with profit increasing to US$ 2,610 million, surpassing the initial 2020 figures.
- Segment Profit Margin Analysis
- The segment profit margin exhibited significant volatility, starting at 25.98% in 2020 before contracting sharply to 15.26% in 2021. Although the margin improved to 19.47% in 2022, it did not return to the 2020 peak. This suggests that while absolute profitability recovered, the efficiency of converting sales into operating profit remained lower than 2020 levels despite the substantial increase in net sales.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment Profit Margin: Refrigeration
Carrier Global Corp.; Refrigeration; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Operating profit | 483) | 476) | 357) |
| Net sales | 3,883) | 4,127) | 3,333) |
| Segment Profitability Ratio | |||
| Segment profit margin1 | 12.44% | 11.53% | 10.71% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2022 Calculation
Segment profit margin = 100 × Operating profit ÷ Net sales
= 100 × 483 ÷ 3,883 = 12.44%
The Refrigeration segment demonstrated a consistent improvement in operational efficiency and profitability between 2020 and 2022. While revenue experienced volatility, the segment successfully expanded its profit margins and increased absolute operating profit throughout the period.
- Operating Profit Trends
- Operating profit exhibited steady growth over the three-year period, rising from US$ 357 million in 2020 to US$ 476 million in 2021, and reaching US$ 483 million by the end of 2022. This indicates a resilient ability to generate earnings despite fluctuations in top-line performance.
- Net Sales Performance
- Net sales showed a non-linear trajectory, increasing significantly from US$ 3,333 million in 2020 to a peak of US$ 4,127 million in 2021. A subsequent contraction was observed in 2022, with net sales decreasing to US$ 3,883 million.
- Segment Profit Margin Expansion
- The segment profit margin increased linearly, moving from 10.71% in 2020 to 11.53% in 2021, and further expanding to 12.44% in 2022. The expansion of the margin in 2022 is particularly significant as it occurred concurrently with a decline in net sales, suggesting enhanced pricing power, a more favorable product mix, or effective cost-reduction initiatives.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment Profit Margin: Fire & Security
Carrier Global Corp.; Fire & Security; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Operating profit | 1,630) | 662) | 584) |
| Net sales | 3,570) | 5,515) | 4,985) |
| Segment Profitability Ratio | |||
| Segment profit margin1 | 45.66% | 12.00% | 11.72% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2022 Calculation
Segment profit margin = 100 × Operating profit ÷ Net sales
= 100 × 1,630 ÷ 3,570 = 45.66%
The Fire & Security segment exhibited a significant divergence between revenue generation and profitability over the three-year period ending December 31, 2022. While top-line sales experienced a sharp contraction in the final year, operating profit and profit margins grew substantially, suggesting a fundamental shift in the segment's cost structure or business composition.
- Operating Profit Trends
- Operating profit demonstrated consistent growth, increasing from US$ 584 million in 2020 to US$ 662 million in 2021. A sharp acceleration occurred in 2022, where operating profit surged to US$ 1,630 million, marking a significant increase in absolute earnings despite a decline in sales.
- Net Sales Performance
- Net sales followed a non-linear trajectory, rising from US$ 4,985 million in 2020 to a peak of US$ 5,515 million in 2021. This was followed by a substantial decrease in 2022, with net sales falling to US$ 3,570 million, indicating a contraction in the scale of operations or the divestiture of specific business units.
- Segment Profit Margin Analysis
- The segment profit margin remained relatively stable between 2020 and 2021, moving slightly from 11.72% to 12.00%. In 2022, the margin experienced an anomalous increase to 45.66%. This dramatic expansion in margin, coinciding with a decrease in net sales and an increase in operating profit, indicates a high degree of operational leverage or the removal of low-margin revenue streams from the segment's portfolio.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment Return on Assets (Segment ROA)
Carrier Global Corp., ROA by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 81.79% | 73.18% | 114.51% |
| Refrigeration | 37.76% | 37.04% | 31.73% |
| Fire & Security | 109.25% | 55.03% | 32.66% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The analysis of segment return on assets (ROA) reveals divergent performance trajectories across the three reportable segments between 2020 and 2022. While the HVAC segment experienced a correction from an initial peak, the Refrigeration and Fire & Security segments demonstrated consistent growth, with the latter exhibiting an accelerating upward trend.
- HVAC Segment
- A significant decline in ROA was observed between 2020 and 2021, falling from 114.51% to 73.18%. A partial recovery occurred in 2022, with the ratio increasing to 81.79%. Despite the volatility, the segment maintained a high return relative to the other business units throughout the period.
- Refrigeration Segment
- This segment demonstrated stable and incremental growth. The ROA rose from 31.73% in 2020 to 37.04% in 2021, ending the period at 37.76% in 2022. This represents a steady improvement in asset efficiency over the three-year horizon.
- Fire & Security Segment
- An aggressive expansion in asset returns is evident in this segment. The ROA grew from 32.66% in 2020 to 55.03% in 2021, followed by a substantial surge to 109.25% by December 31, 2022. This trajectory indicates a rapid increase in the profitability generated per unit of assets employed.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment ROA: HVAC
Carrier Global Corp.; HVAC; segment ROA calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Operating profit | 2,610) | 1,738) | 2,462) |
| Segment assets | 3,191) | 2,375) | 2,150) |
| Segment Profitability Ratio | |||
| Segment ROA1 | 81.79% | 73.18% | 114.51% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2022 Calculation
Segment ROA = 100 × Operating profit ÷ Segment assets
= 100 × 2,610 ÷ 3,191 = 81.79%
The HVAC segment demonstrated significant volatility in profitability alongside a consistent expansion of its asset base between 2020 and 2022.
- Operating Profit Trends
- Operating profit experienced a notable decline in 2021, falling from 2,462 million USD to 1,738 million USD. A strong recovery followed in 2022, with profit increasing to 2,610 million USD, marking the highest absolute profit level within the three-year period.
- Asset Base Growth
- A steady upward trajectory is observed in segment assets, which rose from 2,150 million USD in 2020 to 3,191 million USD by December 31, 2022. This represents a cumulative increase of approximately 48.4%, indicating a sustained growth in the resource base utilized by the segment.
- Return on Assets (ROA) Dynamics
- The Segment ROA showed a sharp contraction from 114.51% in 2020 to 73.18% in 2021, resulting from the simultaneous decrease in operating profit and increase in total assets. While the ROA partially recovered to 81.79% in 2022, it remained significantly lower than the 2020 peak, as the expansion of the asset base outpaced the growth in operating profit.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment ROA: Refrigeration
Carrier Global Corp.; Refrigeration; segment ROA calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Operating profit | 483) | 476) | 357) |
| Segment assets | 1,279) | 1,285) | 1,125) |
| Segment Profitability Ratio | |||
| Segment ROA1 | 37.76% | 37.04% | 31.73% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2022 Calculation
Segment ROA = 100 × Operating profit ÷ Segment assets
= 100 × 483 ÷ 1,279 = 37.76%
The Refrigeration segment demonstrates a consistent upward trajectory in both profitability and asset efficiency over the three-year period ending December 31, 2022. Profitability growth outpaced the expansion of the asset base, resulting in a sustained increase in the return on assets.
- Operating Profit Trends
- A steady increase in operating profit is observed, rising from 357 million US dollars in 2020 to 483 million US dollars by 2022. The most significant growth occurred between 2020 and 2021, where profit increased by approximately 33%, followed by a period of stabilization between 2021 and 2022.
- Asset Base Evolution
- Segment assets grew from 1,125 million US dollars in 2020 to 1,285 million US dollars in 2021. In 2022, the asset base remained relatively flat with a slight decrease to 1,279 million US dollars, suggesting that the segment achieved further profit growth without requiring additional capital investment.
- Segment Return on Assets (ROA)
- The segment ROA shows a continuous improvement, climbing from 31.73% in 2020 to 37.76% in 2022. This trend indicates an increase in the efficiency with which the segment utilizes its assets to generate operating earnings, particularly in the final year where ROA improved despite stagnant asset growth.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment ROA: Fire & Security
Carrier Global Corp.; Fire & Security; segment ROA calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Operating profit | 1,630) | 662) | 584) |
| Segment assets | 1,492) | 1,203) | 1,788) |
| Segment Profitability Ratio | |||
| Segment ROA1 | 109.25% | 55.03% | 32.66% |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2022 Calculation
Segment ROA = 100 × Operating profit ÷ Segment assets
= 100 × 1,630 ÷ 1,492 = 109.25%
The Fire & Security segment exhibited a strong upward trajectory in financial performance between 2020 and 2022, characterized by a substantial increase in operating profit and a dramatic improvement in asset utilization efficiency.
- Operating Profit Trends
- A consistent increase in operating profit is observed, rising from US$ 584 million in 2020 to US$ 662 million in 2021, followed by a significant surge to US$ 1,630 million by the end of 2022. The acceleration in growth between 2021 and 2022 represents a nearly 146% increase in annual operating profit.
- Asset Base Dynamics
- Segment assets underwent a period of volatility, decreasing from US$ 1,788 million in 2020 to US$ 1,203 million in 2021, a reduction of approximately 33%. While assets increased to US$ 1,492 million in 2022, the total asset base remained below 2020 levels despite the massive increase in profitability.
- Return on Assets (ROA) Analysis
- The Segment ROA experienced an exponential increase, climbing from 32.66% in 2020 to 55.03% in 2021, and reaching 109.25% in 2022. This indicates that the segment generated significantly more profit per dollar of assets employed, driven first by asset reduction in 2021 and subsequently by the sharp rise in operating income in 2022.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment Asset Turnover
Carrier Global Corp., asset turnover by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 4.20 | 4.80 | 4.41 |
| Refrigeration | 3.04 | 3.21 | 2.96 |
| Fire & Security | 2.39 | 4.58 | 2.79 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The asset turnover ratios across all reportable segments exhibit a synchronized pattern of growth in 2021 followed by a contraction in 2022. While the HVAC segment consistently maintains the highest efficiency in generating revenue relative to its asset base, the Fire & Security segment demonstrates the most significant volatility during the observed period.
- HVAC
- This segment maintains the highest overall asset turnover of the three groups, peaking at 4.80 in 2021. Although there was a decline to 4.20 by the end of 2022, the ratio remains the strongest in the portfolio, indicating superior asset utilization efficiency.
- Refrigeration
- The refrigeration segment displays the highest level of stability, with ratios fluctuating minimally between 2.96 and 3.21. The slight peak in 2021 was followed by a marginal decrease in 2022, suggesting a consistent and steady relationship between asset investments and revenue output.
- Fire & Security
- Significant variance is observed within this segment. After a substantial increase to 4.58 in 2021, the ratio fell sharply to 2.39 in 2022. This final value represents the lowest efficiency level across all segments and years, reflecting a marked decline in the ability to generate sales from the assets employed in this segment.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment Asset Turnover: HVAC
Carrier Global Corp.; HVAC; segment asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Net sales | 13,408) | 11,390) | 9,478) |
| Segment assets | 3,191) | 2,375) | 2,150) |
| Segment Activity Ratio | |||
| Segment asset turnover1 | 4.20 | 4.80 | 4.41 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2022 Calculation
Segment asset turnover = Net sales ÷ Segment assets
= 13,408 ÷ 3,191 = 4.20
The HVAC segment exhibited a consistent upward trajectory in net sales over the analyzed three-year period, although the efficiency of asset utilization fluctuated.
- Revenue Performance
- Net sales demonstrated sustained growth, increasing from US$ 9,478 million in 2020 to US$ 11,390 million in 2021, and further rising to US$ 13,408 million by December 31, 2022. This indicates a strong and steady expansion of the segment's market activity.
- Asset Base Expansion
- Segment assets grew from US$ 2,150 million in 2020 to US$ 2,375 million in 2021, followed by a more substantial increase to US$ 3,191 million in 2022. The acceleration of asset growth in the final year suggests a significant increase in capital investment or resource acquisition.
- Asset Turnover Dynamics
- The segment asset turnover ratio initially improved from 4.41 in 2020 to a peak of 4.80 in 2021, reflecting an increase in operational efficiency. However, the ratio declined to 4.20 in 2022. This downward movement in the final year is a direct result of the growth in segment assets outpacing the growth in net sales, leading to a temporary reduction in asset productivity.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment Asset Turnover: Refrigeration
Carrier Global Corp.; Refrigeration; segment asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Net sales | 3,883) | 4,127) | 3,333) |
| Segment assets | 1,279) | 1,285) | 1,125) |
| Segment Activity Ratio | |||
| Segment asset turnover1 | 3.04 | 3.21 | 2.96 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2022 Calculation
Segment asset turnover = Net sales ÷ Segment assets
= 3,883 ÷ 1,279 = 3.04
The Refrigeration segment experienced a period of volatility in revenue and asset utilization between 2020 and 2022, characterized by a peak in operational efficiency during the 2021 fiscal year.
- Net Sales Performance
- Net sales showed significant growth in 2021, rising from US$ 3,333 million to US$ 4,127 million. This upward trend reversed in 2022, as sales decreased to US$ 3,883 million.
- Segment Asset Trends
- The asset base expanded from US$ 1,125 million in 2020 to US$ 1,285 million in 2021. Assets remained relatively stagnant through 2022, ending the period at US$ 1,279 million.
- Segment Asset Turnover Analysis
- The asset turnover ratio increased from 2.96 in 2020 to 3.21 in 2021, indicating an improvement in the segment's ability to generate revenue per unit of assets. In 2022, the ratio moderated to 3.04; this decline is attributed to the reduction in net sales occurring while the asset base remained largely unchanged.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment Asset Turnover: Fire & Security
Carrier Global Corp.; Fire & Security; segment asset turnover calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Net sales | 3,570) | 5,515) | 4,985) |
| Segment assets | 1,492) | 1,203) | 1,788) |
| Segment Activity Ratio | |||
| Segment asset turnover1 | 2.39 | 4.58 | 2.79 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2022 Calculation
Segment asset turnover = Net sales ÷ Segment assets
= 3,570 ÷ 1,492 = 2.39
The Fire & Security segment experienced significant volatility in operational efficiency between 2020 and 2022. After a period of substantial improvement in asset utilization, the segment saw a sharp decline in the final year, with performance metrics falling below 2020 levels.
- Revenue Dynamics
- Net sales increased from 4,985 million US$ in 2020 to 5,515 million US$ in 2021. This growth was followed by a significant contraction in 2022, where net sales fell to 3,570 million US$, representing a decrease of approximately 35% relative to the previous year.
- Asset Base Fluctuations
- Segment assets decreased from 1,788 million US$ in 2020 to 1,203 million US$ in 2021. In 2022, the asset base expanded to 1,492 million US$, indicating an increase in invested capital during a period of declining revenue.
- Asset Turnover Performance
- The asset turnover ratio exhibited a peak in 2021 at 4.58, resulting from the simultaneous increase in sales and reduction in the asset base. However, this trend reversed in 2022, with the ratio dropping to 2.39. This decline reflects a diminished ability to generate sales from the segment's assets compared to both the 2021 peak and the 2020 baseline of 2.79.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment Capital Expenditures to Depreciation
Carrier Global Corp., capital expenditures to depreciation by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 0.91 | 1.21 | 1.15 |
| Refrigeration | 1.03 | 1.08 | 0.67 |
| Fire & Security | 0.69 | 0.59 | 0.47 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
An analysis of the capital expenditures to depreciation ratios across reportable segments reveals varying investment strategies and asset replacement cycles between 2020 and 2022.
- HVAC Segment
- The ratio for the HVAC segment experienced an initial increase from 1.15 in 2020 to a peak of 1.21 in 2021, before declining to 0.91 by the end of 2022. This trajectory indicates a period where capital investment exceeded depreciation, followed by a shift toward a more conservative investment posture in the final year of the period.
- Refrigeration Segment
- A substantial upward shift is observed in the Refrigeration segment, where the ratio rose from 0.67 in 2020 to 1.08 in 2021, and remained relatively stable at 1.03 in 2022. This transition suggests a strategic pivot toward increasing capital investment to a level that fully offsets annual depreciation.
- Fire & Security Segment
- The Fire & Security segment demonstrated a consistent upward trend, with the ratio increasing incrementally from 0.47 in 2020 to 0.59 in 2021, and further to 0.69 in 2022. Although capital expenditures remained below the level of depreciation throughout the period, the steady growth indicates a gradual increase in investment intensity.
Collectively, the trends show a divergence in capital allocation priorities across the business. While the HVAC segment saw a contraction in its investment-to-depreciation ratio in 2022, the Refrigeration and Fire & Security segments exhibited sustained growth in their relative investment levels over the three-year period.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment Capital Expenditures to Depreciation: HVAC
Carrier Global Corp.; HVAC; segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Capital expenditures | 232) | 225) | 188) |
| Depreciation & amortization | 256) | 186) | 163) |
| Segment Financial Ratio | |||
| Segment capital expenditures to depreciation1 | 0.91 | 1.21 | 1.15 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2022 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation & amortization
= 232 ÷ 256 = 0.91
The HVAC segment demonstrated a shift in its investment strategy between 2020 and 2022, transitioning from a period of aggressive asset expansion to a phase where depreciation exceeded new capital investment.
- Capital Expenditures Trend
- Annual capital expenditures showed a consistent upward trajectory, increasing from 188 million USD in 2020 to 232 million USD by the end of 2022. This represents a steady increase in the absolute volume of capital deployed into the segment.
- Depreciation and Amortization Growth
- Depreciation and amortization expenses grew from 163 million USD in 2020 to 256 million USD in 2022. The most significant increase occurred between 2021 and 2022, where expenses rose by approximately 37.6%, outpacing the growth rate of capital expenditures.
- Segment Capital Expenditures to Depreciation Ratio
- The investment-to-depreciation ratio increased from 1.15 in 2020 to a peak of 1.21 in 2021, indicating that the segment was investing in new assets at a rate higher than the consumption of existing ones. However, the ratio declined sharply to 0.91 in 2022. This decline indicates a pivot where the rate of asset depreciation surpassed new capital investment, suggesting a shift toward asset maintenance or the maturation of previous investment cycles.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment Capital Expenditures to Depreciation: Refrigeration
Carrier Global Corp.; Refrigeration; segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Capital expenditures | 32) | 39) | 26) |
| Depreciation & amortization | 31) | 36) | 39) |
| Segment Financial Ratio | |||
| Segment capital expenditures to depreciation1 | 1.03 | 1.08 | 0.67 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2022 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation & amortization
= 32 ÷ 31 = 1.03
The Refrigeration segment exhibited a significant shift in its capital allocation strategy between 2020 and 2022, transitioning from a period of under-investment relative to asset wear-and-tear to a phase of sustainable replacement and moderate growth.
- Capital Expenditure Trends
- Annual capital expenditures demonstrated volatility over the three-year period. Spending increased from US$ 26 million in 2020 to a peak of US$ 39 million in 2021, representing a 50% increase, before moderating to US$ 32 million in 2022.
- Depreciation and Amortization Trends
- A consistent downward trajectory is observed in depreciation and amortization expenses, which declined steadily from US$ 39 million in 2020 to US$ 36 million in 2021, and further to US$ 31 million in 2022. This persistent decline suggests a reduction in the total depreciable asset base or the full depreciation of older assets.
- Capital Expenditures to Depreciation Ratio Analysis
- The ratio of capital expenditures to depreciation rose from 0.67 in 2020 to 1.08 in 2021, eventually stabilizing at 1.03 in 2022. The 2020 ratio of 0.67 indicates that the segment was investing significantly less than the value of the assets it was consuming, which is often characteristic of a contraction or a period of deferred maintenance. The shift to a ratio exceeding 1.00 in 2021 and 2022 signals a pivot toward maintaining the asset base and investing in new capacity, as capital spending began to outpace annual depreciation.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment Capital Expenditures to Depreciation: Fire & Security
Carrier Global Corp.; Fire & Security; segment capital expenditures to depreciation calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| Selected Financial Data (US$ in millions) | |||
| Capital expenditures | 40) | 49) | 51) |
| Depreciation & amortization | 58) | 83) | 108) |
| Segment Financial Ratio | |||
| Segment capital expenditures to depreciation1 | 0.69 | 0.59 | 0.47 |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
1 2022 Calculation
Segment capital expenditures to depreciation = Capital expenditures ÷ Depreciation & amortization
= 40 ÷ 58 = 0.69
The Fire & Security segment exhibits a simultaneous decline in both capital expenditures and depreciation and amortization expenses over the three-year period ending December 31, 2022. Despite the reduction in absolute spending, the relationship between these two metrics has shifted, resulting in a steadily improving reinvestment ratio.
- Capital Expenditure Trends
- Capital expenditures decreased consistently over the analyzed period, falling from 51 million US dollars in 2020 to 40 million US dollars by the end of 2022. This indicates a downward trend in the absolute volume of new investments within the segment.
- Depreciation and Amortization Trends
- A more pronounced decline is observed in depreciation and amortization expenses, which dropped from 108 million US dollars in 2020 to 58 million US dollars in 2022. The rate of decrease in depreciation expenses exceeded the rate of decrease in capital expenditures.
- Capital Expenditures to Depreciation Ratio
- The ratio of capital expenditures to depreciation increased steadily from 0.47 in 2020 to 0.69 in 2022. While the ratio remains below 1.0, suggesting that capital investments are not fully offsetting the depreciation of the asset base, the upward trajectory indicates an increase in the proportion of depreciation being reinvested back into the segment.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Net sales
Carrier Global Corp., net sales by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 13,408) | 11,390) | 9,478) |
| Refrigeration | 3,883) | 4,127) | 3,333) |
| Fire & Security | 3,570) | 5,515) | 4,985) |
| Total | 20,861) | 21,032) | 17,796) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
Total net sales exhibited an overall upward trajectory between 2020 and 2022, peaking in 2021 at 21,032 million USD before experiencing a marginal contraction to 20,861 million USD in 2022. The aggregate performance reveals a significant shift in the composition of revenue streams, characterized by the expanding dominance of the HVAC segment and a contraction in other business lines.
- HVAC Segment Performance
- A consistent and strong growth trajectory is observed in the HVAC segment. Net sales increased from 9,478 million USD in 2020 to 13,408 million USD in 2022, representing the most substantial and stable expansion across all reportable segments.
- Refrigeration Segment Performance
- The refrigeration segment demonstrated moderate volatility. Following an increase from 3,333 million USD in 2020 to a peak of 4,127 million USD in 2021, net sales saw a slight decline to 3,883 million USD in 2022.
- Fire & Security Segment Performance
- Revenue within the Fire & Security segment showed a significant decline in the final period. After growing from 4,985 million USD in 2020 to 5,515 million USD in 2021, sales dropped sharply to 3,570 million USD in 2022.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Operating profit
Carrier Global Corp., operating profit by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 2,610) | 1,738) | 2,462) |
| Refrigeration | 483) | 476) | 357) |
| Fire & Security | 1,630) | 662) | 584) |
| Total | 4,723) | 2,876) | 3,403) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
Total operating profit across all reportable segments demonstrated a non-linear growth trajectory between 2020 and 2022. A contraction was observed in 2021, with total profit decreasing from US$ 3,403 million to US$ 2,876 million, followed by a substantial recovery and expansion in 2022, reaching US$ 4,723 million.
- HVAC Segment Performance
- As the largest contributor to total operating profit, this segment experienced significant volatility. A decline was noted in 2021, where profit fell to US$ 1,738 million from US$ 2,462 million in 2020. This trend reversed in 2022, with a strong rebound to US$ 2,610 million, marking a recovery above 2020 levels.
- Refrigeration Segment Performance
- A steady and consistent upward trend is evident in this segment. Operating profit grew from US$ 357 million in 2020 to US$ 476 million in 2021, maintaining its growth momentum with a slight increase to US$ 483 million in 2022.
- Fire & Security Segment Performance
- The most aggressive growth pattern is observed within the Fire & Security segment. After a moderate increase from US$ 584 million in 2020 to US$ 662 million in 2021, the segment experienced an accelerated surge in 2022, with operating profit rising to US$ 1,630 million.
The consolidated results indicate that the overall growth in operating profit by 2022 was driven by a combination of the recovery in the HVAC segment and a sharp escalation in profitability within the Fire & Security division.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Segment assets
Carrier Global Corp., segment assets by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 3,191) | 2,375) | 2,150) |
| Refrigeration | 1,279) | 1,285) | 1,125) |
| Fire & Security | 1,492) | 1,203) | 1,788) |
| Total | 5,962) | 4,863) | 5,063) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
Total reportable segment assets exhibited a volatile trajectory over the observed three-year period, concluding with a substantial expansion in 2022. While aggregate assets experienced a slight contraction of approximately 4% between 2020 and 2021, there was a significant recovery in 2022, with total assets increasing by 22.6% to reach 5,962 million USD.
- HVAC Segment Expansion
- A consistent and accelerating upward trend is observed within the HVAC segment. Assets grew from 2,150 million USD in 2020 to 3,191 million USD by the end of 2022. The growth rate intensified notably in the final year, with a 34.3% increase between 2021 and 2022, positioning this segment as the primary driver of overall asset growth.
- Refrigeration Segment Performance
- The Refrigeration segment showed initial growth, rising from 1,125 million USD in 2020 to 1,285 million USD in 2021. This growth plateaued in 2022, as assets remained nearly stagnant at 1,279 million USD, representing a marginal decrease of 0.5% year-over-year.
- Fire & Security Segment Volatility
- The Fire & Security segment displayed the highest level of variance. A significant contraction occurred in 2021, where assets declined from 1,788 million USD to 1,203 million USD, a reduction of approximately 32.7%. Although a recovery was observed in 2022, with assets increasing to 1,492 million USD, the segment failed to return to its 2020 baseline.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Capital expenditures
Carrier Global Corp., capital expenditures by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 232) | 225) | 188) |
| Refrigeration | 32) | 39) | 26) |
| Fire & Security | 40) | 49) | 51) |
| Total | 304) | 313) | 265) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
Total capital expenditures across reportable segments exhibited an overall upward trajectory from 2020 to 2022, despite a slight contraction in the final year. The investment profile is heavily weighted toward the HVAC segment, which serves as the primary driver of capital allocation growth.
- HVAC Segment
- A consistent upward trend in capital spending is observed within the HVAC segment. Expenditures rose from 188 million US dollars in 2020 to 232 million US dollars in 2022. This steady increase indicates a sustained commitment to expanding or upgrading capacity within this core business area.
- Refrigeration Segment
- Investment in the Refrigeration segment experienced volatility. After an initial increase from 26 million US dollars in 2020 to 39 million US dollars in 2021, spending declined to 32 million US dollars in 2022. Despite this late-period dip, the 2022 expenditure remains higher than the 2020 baseline.
- Fire & Security Segment
- A sustained downward trend is evident in the Fire & Security segment. Capital expenditures decreased annually, moving from 51 million US dollars in 2020 to 49 million US dollars in 2021, and further declining to 40 million US dollars by the end of 2022. This suggests a strategic reduction in capital investment for this specific segment.
- Aggregate Capital Expenditure
- Total expenditures increased by approximately 18% between 2020 and 2021, rising from 265 million US dollars to 313 million US dollars. A marginal decrease followed in 2022, with total spending settling at 304 million US dollars. The overall growth in total spending is primarily attributable to the expansion of HVAC investments, which offset the declines observed in the Fire & Security segment.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?
Depreciation & amortization
Carrier Global Corp., depreciation & amortization by reportable segment
US$ in millions
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | |
|---|---|---|---|
| HVAC | 256) | 186) | 163) |
| Refrigeration | 31) | 36) | 39) |
| Fire & Security | 58) | 83) | 108) |
| Total | 345) | 305) | 310) |
Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
Total depreciation and amortization expenditures remained relatively stable between 2020 and 2021 before experiencing a significant increase in 2022. The aggregate annual expense rose from US$ 310 million in 2020 to US$ 345 million in 2022, driven primarily by divergent trends across the individual reportable segments.
- HVAC Segment
- A consistent and accelerating upward trend is observed, with expenses increasing from US$ 163 million in 2020 to US$ 256 million in 2022. This trajectory suggests substantial capital investment or the integration of new assets, resulting in this segment becoming the primary driver of total depreciation and amortization costs.
- Refrigeration Segment
- A gradual downward trend is evident, with costs declining from US$ 39 million in 2020 to US$ 31 million in 2022. This suggests a slow reduction in the depreciable asset base within this specific operation.
- Fire & Security Segment
- A sharp and continuous decline is noted, as expenses dropped from US$ 108 million in 2020 to US$ 58 million in 2022. This significant reduction likely reflects the divestiture of assets or a strategic downsizing of the segment's infrastructure.
The proportional distribution of depreciation and amortization has shifted heavily toward the HVAC segment. While HVAC accounted for approximately 52.6% of the total in 2020, its share increased to approximately 74.2% by 2022, highlighting a concentration of asset-related expenses in this business unit.
AI Ask an analyst for more
Hi, I’m an AI-powered financial analyst at Stock Analysis on Net.
Without a user account, I tend to respond rather slowly.
How can I help you?