Carrier, Trane CEOs speak at Laguna Beach conference

Carrier and Trane CEOs, Dave Gitlin and Dave Regnery, last week flew to Laguna Beach, CA, to speak about their businesses at Morgan Stanley’s 12th Annual Laguna Conference. 

• Zoom out: The companies had a strong second quarter, with revenues up over 10% and positive expectations for residential unit volumes during the rest of this year. 

What’s happening: Both Daves chatted with Morgan Stanley’s Chris Snyder for 30 minutes each, covering company financials and what’s happening in 2025. 

• Unfortunately, I wasn’t invited — my invitation must have gotten lost in the mail — but I took a few notes from the conference recordings:

Dave Gitlin, Carrier: “I think we took our medicine a bit as we got into 2023 but it feels like it’s turning. We’re encouraged by the orders we’re seeing.” 

• “You’ll have this interplay in 2024 and 2025 between 410A and 454B. Exactly how much 410 we start with on the shelf next year is TBD, but we’re working closely with our distribution and dealer network to see exactly how much they want.” 

• “We will do some bolt-on M&A [in 2025]. We announced a small, interesting one in the cold chain space, but for the most part, over the coming quarters, we’re heads down.”

Dave Regnery, Trane: “We’ve been doing refrigerant changes since 2013, so this isn’t new to us. [However], one thing we did a little bit differently here is mixed-model lines.”

• “It cost us more, but we’re able to run 410 and 454 down the same line. Yeah, we have to change what we call ‘line side inventory,’ but we believe that’ll be a great long-term investment.” 

• The big picture: “It’s estimated there’s 400 billion sq. ft. of commercial real estate that needs to be decarbonized and 600 billion on the residential side — there’s a trillion sq. ft. of decarbonization opportunity.”

Of note: Data centers got some attention, with Gitlin calling them a “once-in-a-lifetime opportunity in commercial HVAC,” given their skyrocketing energy consumption.

The bottom line: While the bulk of their discussions revolved around the commercial side of their businesses, both CEOs have recently expressed optimism about the residential side moving forward. 

• Full recordings: Carrier, Trane