Otis Earns 77 Cents per Share

We had more good earnings news this morning. Otis Worldwide (OTIS) reported Q1 earnings of 77 cents per share. That was up 6.9% over last year and it was three cents more than expectations. Organic sales rose 3.1% to $3.4 billion.

The quarter was even stronger than it may appear. Q1 cash flow from operations was $504 million. Free cash flow was $474 million, or 152% of net income.

“Otis delivered a strong first quarter with broad based growth in New Equipment orders and maintenance portfolio units, nearly 6% Service organic sales growth, 30 basis points of Otis adjusted margin expansion and high-single digit adjusted EPS growth. In addition, year-to-date, we have made progress on our capital allocation strategy by successfully increasing our ownership in Zardoya Otis that will result in its automatic delisting in early May, repaying $500 million of debt and returning cash to shareholders through $200 million in share repurchases and a more than 20% increase in our dividend,” said Judy Marks, Chair, CEO & President. “These achievements, and the progress we are making on our ESG initiatives, demonstrate the strength of our strategy, our ability to execute and the resilience of our business. Looking ahead, despite the intensifying macro challenges, including the impact from the crisis in Ukraine, we expect to achieve 3 to 4% organic sales growth and 10% adjusted EPS growth, at the midpoint.”

During the quarter, Otis bought back $200 million of stock and repaid $500 million of debt. Otis’s operating profit expanded from 22.4% to 22.9%.

Otis also revised its full-year outlook, excluding business in Russia. The company now expects sales of $14.1 to $14.3 billion and EPS of $3.22 to $3.27. The previous range was $3.20 to $3.30 per share.

The stock has been as high as 3.5% today.

Posted by on April 25th, 2022 at 9:39 am


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