Carrier Global Corporation (CARR), the climate and energy solutions company, reported third-quarter net sales of $6.26 billion, up 12% from a year earlier, as organic sales accelerated to 15% after a 3% organic increase in the second quarter. Divestitures were a 3% headwind.

The company booked a $3.1 billion non-cash goodwill impairment at Climate Solutions Europe, producing a GAAP operating loss of ($2.27) billion and GAAP diluted loss of ($3.16) a share from continuing operations. Adjusted operating profit rose 33% to $1.09 billion, and adjusted operating margin expanded 260 basis points to 17.4%, which the company attributed predominantly to favorable volume and price, partially offset by higher input costs and tariffs. Adjusted EPS was $0.87, up 30% from $0.67, including a roughly $0.10 benefit from IEEPA refunds net of about ($0.02) of non-controlling interest.

Orders excluding NORESCO rose about 35%. Commercial HVAC orders were up about 60% and data-center orders up about 300%. Backlog reached a record of more than $8.5 billion, up 60% versus last year, with long-term agreements valued at multiple billions of dollars and minimum volume commitments additive to backlog. Chairman and CEO David Gitlin said the company expects double-digit organic sales and adjusted EPS growth in 2026 and that record backlog gives it confidence to sustain momentum into 2027.

Climate Solutions Americas was the growth engine. Segment sales were $3.35 billion, up 24%, with organic sales up 25%. Residential sales rose more than 30% and Commercial sales 25%. Segment operating profit increased 40% to $745 million, and margin expanded 250 basis points to 22.2%, including about $120 million of IEEPA refunds and organic growth, partially offset by increased input costs and tariffs.

Climate Solutions Europe sales were $1.34 billion, up 3%, with organic sales up 12% offset by a 7% net divestiture headwind and a 2% currency headwind. Residential heat pumps and air conditioning sales each rose about 35%, more than offsetting high-single-digit declines in boilers. Segment operating profit rose 40% to $168 million, and margin expanded 330 basis points to 12.6%, with the company citing strong organic revenue growth and a roughly 100 basis point net benefit from the correction of a prior-period item, offset by higher inventory-related reserves.

Climate Solutions Asia Pacific, Middle East & Africa sales were $848 million, up 2%, with organic sales up 3% as Commercial rose 10% and RLC declined mid-single digits. Segment operating profit was $103 million and margin 12.1%. Climate Solutions Transportation sales fell 3% to $726 million as Container growth was more than offset by Truck and Trailer; segment operating profit was $117 million and margin 16.1%.

Free cash flow was $674 million, versus $224 million a year earlier, on operating cash flow of $813 million and capital expenditures of $139 million. The company returned about $600 million to shareowners through dividends and repurchases.

Carrier now expects full-year 2026 sales of $23.8 billion to $24.0 billion, with organic growth of approximately 10%, foreign exchange of 1% and net acquisitions/divestitures of (2)%, from prior guidance of about $23 billion with organic growth in the mid-to-high single digits. Adjusted operating profit remains about $3.5 billion, adjusted EPS $2.85 to $2.90, and free cash flow about $2 billion. The company said it expects to return about $2.3 billion through dividends and share repurchases. Riello was divested on July 1 and NORESCO on August 3, with year-over-year revenue headwinds of about $225 million and $125 million, respectively.