PALM BEACH GARDENS, Florida, DALLAS, and CORK, Ireland — Three of the HVAC industry's largest manufacturers — Carrier, Lennox, and Johnson Controls — reported strong quarterly financial results this week, citing continued strength in commercial markets, growing order backlogs, and improving demand trends that prompted each company to raise or reaffirm its fiscal 2026 outlook.
The results point to an HVAC market that remains divided between recovering residential demand and robust commercial investment, particularly in data centers, institutional buildings, and large-scale construction projects.
Carrier reported second-quarter 2026 sales of $6.35 billion, up 4% year over year, with organic sales increasing 3%. The company said commercial HVAC orders increased approximately 65%, while data center orders grew more than 300%. Based on stronger-than-expected performance during the first half of the year and a record backlog, Carrier raised its full-year outlook for sales, adjusted operating profit, and adjusted earnings per share. The company also noted improving residential and light commercial markets in the Americas and Europe.
Lennox also reported higher second-quarter results and increased its full-year guidance, driven by continued demand across its commercial businesses and resilient replacement activity in residential markets. The company reported revenue increased 3% to $1.5 billion. Total segment profit was $355 million, up 2%. Total segment margin was down 30 basis points to 23%. Adjusted diluted earnings per share were flat at $7.72.
Lennox noted that residential market conditions remained challenging during the second quarter, although demand showed improvement over the first quarter. Alok Maskara, CEO of Lennox, pointed to the Duro Dyne and Supco acquisitions helping mitigate the continued softness in the residential end market.
Johnson Controls reported strong fiscal third-quarter results, highlighted by continued growth in orders and a substantial increase in backlog. The company raised its fiscal 2026 guidance after reporting higher sales, expanding margins, and continued demand across its commercial building portfolio.
Johnson Controls reported sales of $4.5 billion, increased 11% over the prior year. Organic sales also increased 11% led by continued strength across Applied HVAC. Products and Systems sales increased 12%, and Services increased 10%. Excluding acquisitions and divestitures and adjusted for foreign currency, orders increased 37% year-over-year and backlog of $15.9 billion increased 40% year-over-year. The increase in orders and backlog was supported by sustained demand from data centers and other mission-critical environments.
For HVAC contractors, the earnings reports reinforce several industry trends:
- Commercial HVAC construction remains a significant growth opportunity, particularly in data centers and large institutional projects;
- Building owners continue investing in energy efficiency, building automation, and modern HVAC systems despite broader economic uncertainty;
- Residential replacement activity appears to be stabilizing after a slower start to the year, providing cautious optimism for contractors focused on the residential market; and
- Strong manufacturer backlogs suggest continued equipment demand into 2027, although lead times and project scheduling remain important considerations.
Collectively, the quarterly results indicate that commercial HVAC continues to drive industry growth while residential markets gradually recover. Manufacturers are responding by increasing financial guidance, expanding production capabilities, and investing in technologies that support high-performance buildings, electrification, and digital building management.
