What happened Shares of heating, ventilation, air conditioning, and refrigeration (HVACR) company Carrier Global (NYSE: CARR) soared by 22.6% in July according to data provided by S&P Global Market Intelligence. The move comes as a result of an improving environment for the HVACR market and a de-risking in the stock itself. Management discussed its end markets during the earnings call on July 30 and it's clear that there was a big improvement in June that carried through into July as well. Surging demand for U.S. residential air conditioning has led a recovery in sales at Carrier. Image source: Getty Images. Carrier generates 80% of its sales in the U.S. and European Union. Together, orders in these regions were down 25% in April and 15% in May on a year-over-year basis. However, U.S. HVAC orders bounced a whopping 40% in June -- led by a 100% increase in U.S. residential orders. Meanwhile, commercial HVAC orders "were up low single digits in the U.S. in June after being down 25% in April and May" CEO David Gitlin said on the earnings call. The E.U. hasn't quite been as strong, but the trend is moving in the same direction. "E.U. orders have been down modestly compared to last year" in July, Gitlin said. It's a good result considering Europe, Middle East, and Africa (EMEA) orders were down 30% in April, down 25% in May, and down 15% in June. The improving trend caused management to increase its full-year guidance from that given in the first-quarter earnings presentation in May. Management now sees: Full-year sales of $15.5 billion to $17 billion, compared to previous guidance for $15 billion to $17 billion Full-year adjusted operating profit of $1.8 billion to $2 billion, compared to previous guidance for $1.7 billion to $2 billion Full-year free cash flow of at least $1.1 billion compared to previous guidance for at least $1 billion So what The relative improvement in its end markets comes at exactly the right time to allay fears that the market may have had around Carrier's debt levels. Carrier holds $11.7 billion in net debt and given that its credit agreement and term loan had a covenant attached to it -- debt to earnings before interest, depreciation, and amortization should not exceed four times -- there were concerns that Carrier would breach it. However, the positive second-quarter earnings and improvement in full-year outlook helped to de-risk the possibility of a breach. CFO Tim McLevish also said Carrier would modify its covenants in its term loan and its credit agreement. Now what Carrier was always going to be the most interesting of the industrial companies created out of the breakup of United Technologies. The stock's performance since its listing in April (up 141% at the time of writing) has been spectacular. Investors will be hoping that management can continue to cut costs and grow revenue as the economy improves in 2021. 10 stocks we like better than Carrier Global CorporationWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Carrier Global Corporation wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of August 1, 2020 Lee Samaha has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source