Earnings quality remains a concern as the operating cash flow to net income ratio dropped to 0.33 in 2026Q1, exacerbated by a $296 million outflow in working capital during the same period.
| Cash from Operations | 2.08B | 2.09B | 563M | 2.61B | 1.74B | 2.24B | 1.69B | 2.06B | 2.06B | 2.1B |
| Operating CF Margin % | - | 9.61% | 2.5% | 13.76% | 10.08% | 10.85% | 9.69% | 11.09% | 10.87% | 11.78% |
| Operating CF Growth % | 808.88% | 271.05% | -78.4% | 49.57% | -22.08% | 32.21% | -17.98% | 0.39% | -2.05% | - |
| Net Income | 1.32B | 1.49B | 1.21B | 1.48B | 3.21B | 1.7B | 2.01B | 2.15B | 2.77B | 1.27B |
| Depreciation & Amortization | 1.29B | 1.27B | 1.23B | 491M | 328M | 338M | 336M | 335M | 357M | 372M |
| Stock-Based Compensation | 72M | 74M | 86M | 71M | 65M | 92M | 77M | 52M | 44M | 34M |
| Deferred Taxes | -511M | -401M | -352M | -243M | -106M | -74M | 97M | -122M | 133M | 872M |
| Other Non-Cash Items | 81M | -208M | -1.95B | 307M | -1.51B | -137M | -910M | 3M | -924M | -675M |
| Working Capital Changes | -257M | -143M | 339M | 503M | -241M | 317M | 86M | -360M | -324M | 228M |
| Change in Receivables | -245M | -98M | -40M | -161M | -51M | -144M | 40M | -106M | -278M | 159M |
| Change in Inventory | 82M | -81M | 292M | 123M | -173M | -408M | -240M | -2M | -151M | -102M |
| Change in Payables | 132M | -219M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Cash from Investing | -350M | -343M | -2.02B | -660M | 1.75B | -692M | 1.11B | -259M | 415M | 271M |
| Capital Expenditures | -423M | -392M | -519M | -439M | -317M | -344M | -312M | -243M | -263M | -326M |
| CapEx % of Revenue | 1.93% | 1.8% | 2.31% | 2.32% | 1.83% | 1.67% | 1.79% | 1.31% | 1.39% | 1.83% |
| Acquisitions | -103M | 0 | -10.26B | -30M | 2.29B | -366M | 0 | 0 | -310M | 472M |
| Investments | - | - | - | - | - | - | - | - | - | - |
| Other Investing | 150M | 81M | 9.01B | -141M | -36M | 7M | 1M | -22M | -44M | 125M |
| Cash from Financing | -2.07B | -4.67B | -4.64B | 4.61B | -2.93B | -1.56B | -681M | -1.98B | -2.63B | -2.19B |
| Debt Issued (Net) | 733M | -889M | -1.88B | 5.49B | -992M | -551M | 9.85B | -6M | 120M | -8M |
| Equity Issued (Net) | -1.91B | -2.89B | -1.94B | -62M | -1.38B | -527M | 0 | 0 | 0 | -286M |
| Dividends Paid | -775M | -772M | -670M | -620M | -509M | -417M | -138M | 0 | 0 | 0 |
| Share Repurchases | -1.91B | -2.89B | -1.94B | -62M | -1.38B | -527M | 0 | 0 | 0 | -286M |
| Other Financing | -114M | -119M | -139M | -199M | -50M | -67M | -10.39B | -1.98B | -2.75B | -1.9B |
| Net Change in Cash | -328M | -2.42B | -5.88B | 6.33B | 501M | -89M | 2.16B | -177M | 1.13B | 0 |
| Free Cash Flow | 1.66B | 1.7B | 44M | 2.17B | 1.43B | 1.89B | 1.38B | 1.82B | 1.79B | 1.77B |
| FCF Margin % | 7.59% | 7.8% | 0.2% | 11.44% | 8.25% | 9.18% | 7.91% | 9.78% | 9.47% | 9.95% |
| FCF Growth % | 215.4% | 3756.82% | -97.97% | 52.03% | -24.67% | 37.17% | -24.18% | 1.56% | 1.13% | - |
| FCF per Share | 1.97 | 2.00 | 0.05 | 2.54 | 1.66 | 2.13 | 1.57 | 2.10 | 2.05 | 2.03 |
| FCF Conversion (FCF/Net Income) | 1.26x | 1.40x | 0.10x | 1.93x | 0.49x | 1.34x | 0.85x | 0.97x | 0.75x | 1.71x |
| Interest Paid | 0 | 0 | 610M | 320M | 297M | 317M | 196M | 83M | 16M | 216M |
| Taxes Paid | 0 | 0 | 2.13B | 942M | 833M | 675M | 819M | 759M | 276M | 917M |
Portfolio transformation execution risk
As reported in financial statements, Carrier’s operating cash flow to net income ratio has frequently dipped below 1.0, with a particularly concerning 0.33 reading in 2026Q1, suggesting that reported accounting profits are not translating into the liquid resources necessary to sustain the company’s ongoing operational requirements.
The persistent gap between net income and operating cash flow indicates that earnings are heavily influenced by non-cash items or aggressive accrual accounting. Investors should monitor whether this divergence is a temporary byproduct of the portfolio transformation or a structural inability to convert sales into actual cash inflows.
Based on EDBL's reported figures, free cash flow has exhibited extreme instability, swinging from a positive $882 million in 2025Q4 to a negative $15 million in 2026Q1, highlighting the difficulty in maintaining consistent cash generation during the company's current phase of aggressive divestiture and integration.
The erratic nature of free cash flow suggests that the business model remains highly sensitive to working capital swings and the timing of large-scale capital projects. This lack of predictability complicates the valuation of the firm, as cash generation appears tethered to non-recurring events rather than steady-state operations.
According to recent SEC filings, Carrier’s working capital changes have been highly erratic, including a massive $296 million outflow in 2026Q1, which significantly hampered the company's ability to generate positive free cash flow during the most recent quarter of the reported period.
These sharp fluctuations in working capital suggest potential inefficiencies in inventory management or delays in collecting receivables from the dealer network. Such volatility may indicate that the company is struggling to align its supply chain with the shifting demand profiles of its newly acquired climate-focused assets.
As indicated by the provided data, Carrier has consistently prioritized share repurchases and dividends despite inconsistent cash generation, with buybacks totaling $1.5 billion in 2024Q4 alone, a move that appears to have pressured the company's overall liquidity position during a period of significant strategic transition.
The decision to return substantial capital to shareholders while simultaneously funding large acquisitions like Viessmann suggests a high-risk capital allocation strategy. This approach warrants further investigation into whether the company is sacrificing balance sheet flexibility to appease investors during a period of operational uncertainty.
Quick answers to the most common questions about buying CARR stock.
Carrier Global Corporation (CARR) generated $2.09B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Carrier Global Corporation (CARR) generated $1.70B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Carrier Global Corporation (CARR) spent $392.0M on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Carrier Global Corporation (CARR) returned $772.0M to shareholders via cash dividends and spent $2.89B on share repurchases. This shows the company's commitment to returning capital to its equity investors.