In This Article:
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Net Sales: $3.3 billion, with organic sales flat year-over-year.
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Adjusted Operating Profit: Increased 3%, with a 40 basis points expansion in margin to 16.7%.
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Adjusted EPS: Grew 5% in the quarter.
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Adjusted Free Cash Flow: $186 million generated.
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Share Repurchases: Approximately $250 million completed.
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Dividend Increase: Announced an 8% increase, cumulative increase since spin approximately 110%.
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Service Organic Sales Growth: 4%, with growth across all business lines.
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Modernization Orders: Increased 12%, with backlog up 14% at constant currency.
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New Equipment Orders: Declined 1% overall, with regional variations.
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New Equipment Operating Profit Margin: Increased 20 basis points to 5.7%.
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2025 Financial Outlook: Net sales expected between $14.6 billion and $14.8 billion.
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Adjusted Free Cash Flow Outlook: Approximately $1.6 billion for 2025.
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Share Repurchase Target for 2025: $800 million.
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Adjusted EPS Outlook for 2025: $4 to $4.10 per share.
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Release Date: April 23, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Otis Worldwide Corp (NYSE:OTIS) reported a 5% growth in adjusted EPS for the first quarter, driven by solid growth in service and margin expansion.
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The company announced an 8% increase in its dividend, marking a cumulative dividend increase of approximately 110% since its spin-off.
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Modernization orders increased by 12%, with a backlog up 14% at constant currency, indicating strong future growth potential.
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The service segment showed resilience with a 4% organic sales growth, supported by a 40 basis points expansion in adjusted operating margin.
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Otis Worldwide Corp (NYSE:OTIS) was recognized by Fortune as one of the world's most admired companies and named to Wall Street Journal's Best Managed Companies list, reflecting strong corporate reputation and management.
Negative Points
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New equipment organic sales declined by 7% in the quarter, with significant declines in China and the Americas.
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The company faces a potential $45 million to $75 million negative impact on operating profit in 2025 due to tariffs on Chinese imports.
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Despite strong performance in other regions, new equipment orders in China declined by more than 20%, aligning with expectations of market stabilization later in the year.
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The repair growth was muted in the first quarter, up only low single digits, due to timing of backlog execution.
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Otis Worldwide Corp (NYSE:OTIS) anticipates a mid-single-digit decline in global new equipment units for the year, with particular weakness expected in the Asia region.