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Data center demand was a key driver. Gitlin said global data center orders were up “over 500%,” and that the company’s data center backlog “now fully covers our expected $1.5 billionof data center sales this year,” adding that Carrier is “targeting to exceed that number.” Later in the Q&A, Gitlin said Carrier still has capacity to take incremental 2026 data center orders, while also “starting to book a fair amount for 2027.”

Gitlin also highlighted Carrier’s integrated “QuantumLeap” offering for data centers, which combines equipment and digital platforms, including chillers, coolant distribution units (CDUs), Nlyte data center infrastructure management, building management systems with digital twin capabilities, air handlers, and lifecycle support. Gitlin said that since launching the offering about a year ago, Carrier has won “ $hundreds of millions” in orders; later he characterized QuantumLeap sales traction as roughly “ $300 million or $400 million,” with “a lot of it” tied to CDUs.

On CDUs, Gitlin said Carrier has already introduced a 1-megawattCDU, expects a 3-megawattversion around the third quarter, and a 5-megawattversion late 2026 or early 2027. He also discussed an expanded investment and partnership with ZutaCore, describing two-phase cooling as likely “where the puck is going overall,” while cautioning that adoption timing is uncertain.

Segment performance: Americas resi softness, Europe heat pumps, China weakness

In the Americas (CSA), Goris reported segment organic sales down 3%. Residential sales fell 12%, driven by distributor-to-dealer “movement” down 8%and lower field inventory levels, down about 35%year over year. Light Commercial sales rose 9%, and Commercial sales were up low single digits, with Carrier expecting “significant sales growth” in the second half driven by data centers. CSA segment operating margin was about 15%, which Goris said was as expected and reflected under-absorption from lower residential volume.

In Europe (CSE), Goris said organic sales were flat but “a few points better than expected.” Residential and light commercial grew low single digits, offset by a mid-single digit decline in commercial. The company pointed to electrification and heat pump adoption, with heat pump sales up “low teens,” partially offset by boilers down “mid-single digits.” Gitlin cited improving economics for heat pumps, noting that the electricity-to-natural-gas ratio in Germany fell to about 2.5, the first time it has been below 3 since early 2023. He also said Germany subsidy applications were up 30%in the quarter and heat pump demand in Germany was up about 20%on the sales side.

CSE margin performance, however, disappointed in the quarter due to “higher temporary promotions” and lower commercial volume, according to Goris. Gitlin said the company implemented price increases and surcharges effective April 1, and said the promotional activity helped convert “about 150new installers” and “over 500homeowners” who were first-time to the brand.

In Asia, the Middle East and Africa (CSAME), Goris said commercial sales outside China were up “high teens,” led by India and Australia, but overall segment organic sales declined 1%due to weakness in China residential and light commercial. China sales were down low teens overall, with RLC down around 25%and commercial down low single digits. Gitlin said it was “hard to call a bottom” in China residential, adding that he sees “no real signs of it turning,” while noting more encouraging opportunities in commercial verticals such as data centers, EV battery-related applications, healthcare, and semiconductor fabrication.

Transportation (CST) posted a third consecutive quarter of organic growth, with container up nearly 40%, partially offset by pressure in global truck and trailer. Goris said the segment’s margin decline reflected unfavorable business mix. In Q&A, Gitlin said container has performed “much better than we expected,” while truck and trailer demand in the Americas has been influenced by fuel prices, pushing some customer capital spending decisions “to the right.”

Tariffs, pricing, and reaffirmed full-year outlook

Gitlin said Carrier is seeing higher input costs from “new tariffs, fuel, and raw material prices,” and expects to offset them “dollar for dollar” through supply chain actions, cost reduction, and pricing. He said Carrier now expects to realize an additional 2 points of pricing globallythis year.

Goris quantified the incremental price impact at roughly $400 million to $450 millionfor the year. He said about 75%of that is related to Section 232 tariffs, with the remaining 25% tied to other inputs including fuel and commodities. He also said pricing would be more weighted to the second half, with more of the incremental pricing showing up in Q3 and Q4 than in Q2.

Despite the better-than-expected first-quarter start, Carrier reaffirmed its full-year outlook due to macro uncertainty. Goris reiterated guidance for approximately $22 billionin sales, with organic growth “flat to low single digits,” and reaffirmed operating profit, adjusted EPS, and free cash flow expectations. The company continued to expect adjusted EPS of about $2.80, up high single digits versus 2025. Guidance includes an estimated $250 millionyear-over-year revenue headwind from the planned exit of Riello, with the sale expected to close before the end of the second quarter.

For the second quarter, Goris said Carrier expects revenue “just below $6 billion,” operating margin of about 17%, a 24%tax rate, and adjusted EPS of about $0.80. He said the company expects “a few hundred million” of free cash generation in Q2 due to normal seasonality.

Gitlin also addressed questions about tariff policy uncertainty, saying the company is having “constructive discussions” and remains “optimistic that something changes” regarding Section 232 tariffs, but added he does not know “whether, when or if something would change.” He said that if tariffs change, Carrier would adjust pricing, while still assuming tariffs do not change when making plans.

On aftermarket, Gitlin said Carrier feels “extremely confident” it will deliver its “sixth year in a row of double-digit growth,” noting the company targets an internal growth rate “closer to 13% or 14%.”

About Carrier Global (NYSE:CARR)

Carrier Global Corporation is a leading global provider of heating, ventilation and air conditioning (HVAC), refrigeration, fire and security, and building automation solutions. The company designs, manufactures and sells a broad portfolio of products that includes air conditioners, furnaces, heat pumps, chillers, rooftop units, commercial refrigeration systems, fire and smoke detection and suppression systems, security sensors and access controls, and a range of building controls and analytics software.

The article " Carrier Global Q1 Earnings Call Highlights " was originally published by MarketBeat.