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Carrier shares slide after Q2 beat as margins compress
Carrier beat Q2 2026 revenue and raised full-year guidance, but adjusted EPS fell 7% and operating margin dropped 190 basis points to 17.2%.
Carrier Global Corp. reported Q2 2026 results that topped expectations and helped drive growth in its data center business, yet the stock fell 9% on the day of the earnings release. The company is also up about 20% in 2026, though it is down more than 20% over the past 12 months, highlighting how sharply the market has reacted to its performance.
Revenue rose 3.9% year over year, and management raised full-year guidance, but the quarter showed margin pressure. Adjusted earnings per share came in at 86 cents, down 7% year over year, while adjusted operating margin compressed 190 basis points to 17.2%. Carrier attributed the margin decline to an unfavorable mix and rising input costs that offset pricing gains.
The earnings report underscored that the investment narrative is increasingly tied to AI infrastructure demand. Carrier said total orders were up roughly 40% year over year in Q2, with data center orders up more than 300%. Backlog exceeded $8 billion, up about 40% year over year and 20% sequentially, and management raised full-year data center sales guidance to roughly $2 billion from a prior estimate of $1.5 billion.
Carrier also reported free cash flow increased to $810 million from $568 million a year ago. Management said it is expanding manufacturing and lab capacity in the U.S. and India to keep pace with demand, and the Residential segment showed improvement with second-quarter sales rising in the high single digits and field inventory down about 25% year over year.