Carrier raises 2026 outlook as data-center orders surge

Carrier Global raised its 2026 financial outlook on July 28 after a sharp increase in global orders, led by commercial HVAC and data-center demand. The result shows how data-center construction is becoming an important source of business for industrial cooling suppliers, while also showing that tariffs, input costs and product mix can absorb part of the benefit.

Carrier reported second-quarter net sales of $6.351 billion, compared with $6.113 billion a year earlier. Reported sales rose 4%, while organic sales increased 3%. The company raised its full-year guidance to approximately $23 billion in sales, approximately $3.5 billion in adjusted operating profit and approximately $2.90 in adjusted earnings per share, compared with prior guidance of about $22 billion, $3.4 billion and $2.80, respectively.

Orders point to stronger commercial demand

Total company orders increased approximately 40% during the quarter, while commercial HVAC orders rose approximately 65% and data-center orders increased more than 300%. Carrier said those comparisons exclude the NORESCO business, which it plans to exit, and Riello, whose divestiture was completed July 1.

Orders are not the same as recognized revenue. Carrier defines them as contractual commitments to provide specified goods or services at an agreed price, and the company separately reports sales when goods or services are recognized. The order increase therefore signals demand and future activity, but it does not establish an equivalent increase in current revenue.

On its earnings call, Carrier said data-center cooling was its fastest-growing business and raised its 2026 data-center sales outlook to approximately $2 billion from about $1.5 billion. Management said the revised 2026 data-center forecast was already in backlog. Carrier also said total backlog was above $8 billion, with about 70% tied to commercial business and roughly 40% tied to data centers.

Growth came with lower margins

Carrier’s adjusted operating margin fell to 17.2% from 19.1% a year earlier, a decline of 190 basis points. Adjusted operating profit was $1.095 billion, down from $1.166 billion. Both adjusted operating profit and adjusted operating margin are non-GAAP measures.

On a GAAP basis, operating profit was $825 million, down 9% from $903 million a year earlier, and diluted earnings per share from continuing operations was $0.60. Adjusted EPS was $0.86, compared with $0.92 a year earlier. Carrier said the adjusted-margin decline reflected higher input costs and unfavorable business mix, despite favorable volume and productivity. Management also said tariff-related pricing was a net negative in the quarter because the pricing response followed the tariffs’ initial effect.

That margin decline is an important qualification to the higher outlook. Carrier expects stronger sales and adjusted earnings for the full year, but the second quarter shows that additional volume does not automatically produce stronger profitability.

A mixed international picture

Carrier’s Climate Solutions Asia Pacific, Middle East and Africa segment reported 4% sales growth, with double-digit growth in India, the Middle East, Southeast Asia and Australia. That growth was partly offset by continued pressure in residential and light-commercial demand in China.

The China weakness was regional rather than a companywide decline across the country. Carrier reported growth in several other CSAME markets, while identifying China’s residential and light-commercial market as a continuing pressure point. Carrier’s Europe segment also reported 6% sales growth and 3% organic growth, although commercial sales were down in the quarter and segment margins declined because of unfavorable mix and selling investments.

What investors and customers should watch

The most important test is whether Carrier converts its order growth and backlog into profitable shipments. Management expects a substantial increase in data-center deliveries during the second half of 2026: it said about $500 million of the approximately $2 billion full-year data-center sales outlook had been delivered in the first half, leaving about $1.5 billion for the remainder of the year.

Investors will be watching whether Carrier can recover margins as pricing catches up with costs, how long tariff and input-cost pressure lasts, and whether the company’s capacity expansion keeps pace with customer demand. Customers and supply-chain partners may face continued competition for commercial HVAC capacity as data-center projects expand.

Carrier’s revised figures are company guidance, not a confirmed future result. The next evidence will come from realized revenue, data-center deliveries, backlog conversion, regional demand, margin performance and any change to the full-year outlook.

Sources

• Carrier Global second-quarter 2026 earnings release
• Reuters report on Carrier's earnings and outlook