Otis Worldwide Corporation Reports Financial Results for Q3 2024

authorIntellectia.AI2024-10-30
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OTIS.N
Illustration by Intellectia.AI

Otis Worldwide Corporation Reports Financial Results for Q3 2024

Otis Worldwide Corporation (NYSE: OTIS) has announced its financial results for the third quarter ending September 30, 2024.

Key Financial Metrics

Financial Metric Q3 2024 YOY Change Consensus Estimates
Total Revenue $3.5 billion +0.7% $3.59 billion
GAAP EPS $1.34 +47.3% -
Adjusted EPS $0.96 +1.1% $0.97

In Q3 2024, Otis reported net sales of $3.5 billion, a slight increase compared to the prior year and slightly below consensus estimates. The company showed a significant increase in its GAAP EPS, driven by non-recurring tax benefits and related interest income. Adjusted EPS rose modestly reflecting solid operational performance but was slightly below market expectations.

Segment Revenue Performance

Segment Q3 2024 Revenue YOY Change
New Equipment $1.3 billion -8.8%
Service $2.2 billion +7.2%

The New Equipment segment faced challenges, with a notable decline in revenue primarily due to a significant drop in sales in China. The Service segment demonstrated robust growth supported by increased sales in maintenance, repair, and modernization.

Key Developments and Operational Highlights

  • Service sales growth reached high single digits.
  • Maintenance portfolio units saw a 4.2% increase.
  • Mod orders were up 3%, with a backlog increased by 14% (12% at constant currency).
  • Share repurchases totaled $200 million in Q3, contributing to $800 million YTD.
  • Cash flow from operations stood at $394 million, with adjusted free cash flow at $381 million.

Executive Comments

According to Judy Marks, Chair, CEO & President, Otis has managed to return to top-line growth, driven by its service-focused business model. The company aims to navigate existing headwinds in the New Equipment sector while strengthening its service operations globally.

Share Repurchase Program

Otis completed share buybacks worth $200 million in the third quarter as part of its ongoing capital allocation strategy.

Forward Guidance

Otis updated its full-year outlook with expected adjusted EPS of approximately $3.85, projecting organic sales growth, particularly in its Service segment.

Stock Price Movement

Following the earnings release, Otis's stock experienced a decline of approximately 0.74%.

This report highlights Otis's mixed performance in Q3 2024, showcasing strength in service operations amidst challenges in new equipment sales, particularly in the Chinese market. Looking forward, the company is poised to enhance service-led growth and operational efficiencies.

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