Carrier wraps industry earnings with consumer, tariff views

Carrier on Tuesday reported Q4 earnings, and executives chimed in on the range of developments impacting the industry, including A2L, tariffs, and consumer health.

Why it matters: The company’s earnings mark the final industry report of 2024, providing a complete look at how the three major U.S.-based residential manufacturers are reading today’s market. 

On consumers: While some reports signal softening consumer demand, Carrier hasn’t seen anything concerning. 

• “The first thing we look at is, ‘Are we seeing a big switchover to repair versus replace?’” said CEO Dave Gitlin. “We ask that of our partners every month, every quarter.”
• “We’ve been paranoid about it, but we honestly have just not seen that,” he added. “Right now, we feel very good.”

Of note: “Just a reminder that the cost to the homeowner… only about a third of that or less is actually the cost of the equipment that’s ours,” added CFO Patrick Goris.

On tariffs: Like peers Lennox and Trane two weeks ago, Carrier expressed confidence in its ability to navigate tariffs, though it highlighted uncertainties.  

• “We know about [China], and we’re confident we have that mitigated,” Gitlin said, referencing the additional 10 percent tariff the President placed on China this month. 

Yes, but: “[On Mexico]… there’s so much we don’t know,” he added, pointing to the one-month delay that Trump announced on February 3. “We don’t know if they will go into place. We don’t know if there will be exemptions.”

• “What I can tell you is the team is all over it. [We’re]… leaning into our factories in the United States… We’re significantly increasing our output out of Charlotte this year.”

On 2025: While Carrier projects residential volume to be “flat to down low single-digits” this year, it anticipates high single-digit sales growth, reaffirming its planned price increases. 

• “[On] 454B, we expect to realize a 10 percent price increase,” Gitlin said, adding that over the next two years, he expects the number to reach 15 to 20 percent. 
• These projections are consistent with what the company has said since July and echo Lennox’s outlook of a 10 percent increase.