Financial Data and Key Metrics Changes - The company reported strong financial performance in 2024, attributed to operational excellence and effective strategy execution [3] - Approximately 89.6% of the voting power was represented at the annual meeting, indicating strong shareholder engagement [10] - The preliminary vote report showed that the advisory vote for executive compensation was approved by only 39.3% of the votes, suggesting potential concerns among shareholders [20] Business Line Data and Key Metrics Changes - The company maintains approximately 2,400,000 elevators and escalators globally, representing the largest service portfolio in the industry [3] - The new equipment business is primarily impacted by tariffs, with an estimated impact ranging from $45 million to $75 million for the remainder of the 2025 fiscal year [22] Market Data and Key Metrics Changes - The company serves customers in over 200 countries and territories, highlighting its extensive global reach [3] - The company is expanding its supply chain to mitigate tariff impacts, indicating adaptability to market conditions [22] Company Strategy and Development Direction - The company is focused on a results-driven, digitally focused, and service-oriented growth strategy to deepen customer relationships and enhance efficiency [2] - The transformational uplift program aims to optimize the organizational structure and drive efficiency at all levels [2][5] - The mission is to be a world-class customer-centric service-oriented company, aligning with global macro trends and new expectations [4][5] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the complex and dynamic nature of the modern world, emphasizing the need for resilience and clarity of mission [5] - The company is actively working on mitigation plans with customers to protect against future tariffs [23] Other Important Information - The company has a strong workforce of 72,000 colleagues, including 44,000 field professionals [3] - The board unanimously recommended a vote against the shareholder proposal for transparency in political spending, indicating a strategic stance on corporate governance [18] Q&A Session Summary Question: What areas of Otis will be impacted by tariffs and what is being done to minimize the impact? - The new equipment business is primarily impacted by tariffs, with an estimated impact of $45 million to $75 million for the remainder of 2025 [22] - The company is expanding its supply chain to multiple suppliers and moving some operations to the United States to mitigate the impact [23]

NEW YORK, May 14, 2025 /PRNewswire/ -- Purcell & Lefkowitz LLP announces that it is investigating Otis Worldwide Corporation (NYSE: OTIS) on behalf of the company's shareholders. The investigation seeks to determine whether Otis Worldwide Corporation's directors breached their fiduciary duties in connection with recent corporate actions. SOURCE Purcell & Lefkowitz LLP If you are a shareholder of Otis Worldwide Corporation and are interested in obtaining additional information about your rights and options, ...

Group 1 - The core thesis on Otis Worldwide Corporation (NYSE: OTIS) is neutral, indicating that macroeconomic challenges, especially in China and the Americas, are significantly impacting short-term revenue and margin trends [1] - Current valuation of Otis Worldwide Corporation already reflects the existing weaknesses in revenue and margins, suggesting that the market has priced in these challenges [1] - There are early signs of potential recovery or stabilization in the company's performance, which could present future opportunities for investors [1]

Financial Performance - Net sales for the quarter ended March 31, 2025, were $3,350 million, a decrease of 3% compared to $3,437 million in the same period of 2024[147]. - The organic volume for the quarter was flat, with a 4% increase in Service offset by a 7% decrease in New Equipment[147]. - Total cost of products and services sold decreased by 2% year-over-year, totaling $2,349 million compared to $2,409 million in 2024[149]. - Gross margin for the quarter was $1,001 million, maintaining a gross margin percentage of 29.9% compared to the same period in 2024[150]. - Net income attributable to Otis Worldwide Corporation decreased to $243 million for the quarter ended March 31, 2025, down from $353 million in the same period in 2024[168]. - The New Equipment segment reported net sales of $1,163 million for the quarter ended March 31, 2025, a decrease of 9% compared to $1,280 million in 2024[172]. - The Service segment achieved net sales of $2,187 million for the quarter ended March 31, 2025, reflecting a 1% increase from $2,157 million in 2024[176]. - The consolidated operating profit margin decreased to 12.3% for the quarter ended March 31, 2025, down from 15.8% in the same period in 2024[170]. - The company reported a net income of $256 million for the quarter ended March 31, 2025, which includes various non-cash expenses[196]. Expenses and Costs - Research and development expenses were $37 million, representing 1.1% of net sales, slightly up from 1.0% in 2024[152]. - Selling, general and administrative expenses increased to $464 million, accounting for 13.9% of net sales, up from 13.4% in 2024[153]. - UpLift restructuring costs for the quarter were $20 million, with total restructuring costs amounting to $43 million, compared to $20 million in 2024[155]. - The company expects to achieve annual recurring savings of $27 million for both 2024 and 2025 restructuring actions, with approximately 80% related to Cost of products and services sold[159]. - The reorganization of operations in China will incur restructuring costs of approximately $40 million, expected to be mostly completed by the end of 2025[160]. Tax and Legal Matters - The company recorded a favorable ruling in German tax litigation, resulting in income tax benefits of approximately $185 million and related interest income of approximately $200 million[135]. - The effective tax rate increased to 30.1% for the quarter ended March 31, 2025, compared to 25.2% in 2024, primarily due to nondeductible obligations[166]. - The company anticipates variability in the tax rate quarter to quarter due to potential discrete items[167]. Cash Flow and Debt - As of March 31, 2025, the company had cash and cash equivalents of approximately $1.9 billion, with 37% held by foreign subsidiaries[185]. - As of March 31, 2025, cash and cash equivalents decreased to $1,918 million from $2,300 million on December 31, 2024[187]. - Total debt increased to $8,406 million as of March 31, 2025, compared to $8,324 million on December 31, 2024[187]. - Net cash provided by operating activities for the quarter ended March 31, 2025, was $190 million, an increase from $171 million in the same period of 2024[193]. - Net cash used in investing activities was $161 million for the quarter ended March 31, 2025, compared to $79 million in the same period of 2024[199]. - Net cash used in financing activities was $428 million for the quarter ended March 31, 2025, down from $467 million in the same period of 2024[203]. - Total debt to total capitalization ratio increased to 251% as of March 31, 2025, from 235% on December 31, 2024[187]. - Net debt to net capitalization ratio improved to 452% as of March 31, 2025, compared to 486% on December 31, 2024[187]. Future Outlook - The UpLift program is expected to generate approximately $200 million in annual run-rate savings by the second half of 2025, with transformation costs estimated at $300 million[131]. - Global macroeconomic conditions, including inflation and high interest rates, are expected to impact financial performance, with potential tariff impacts estimated between $45 million to $75 million[138]. - The company intends to permanently reinvest certain undistributed international earnings unless tax effective to repatriate[187]. - The company has a new share repurchase program approved for up to $2.0 billion, with approximately $1.8 billion remaining as of March 31, 2025[190].

Financial Data and Key Metrics Changes - Otis Worldwide Corporation reported net sales of $3.3 billion with organic sales flat year over year [24] - Adjusted operating profit increased 3% excluding a $16 million foreign exchange headwind, with adjusted operating profit margin expanding 40 basis points to 16.7% [24][11] - Adjusted EPS grew 5% or $0.04 in the quarter, driven by solid operational performance and a lower share count [25] Business Line Data and Key Metrics Changes - Service organic sales grew 4%, with maintenance and repair services up 3% and modernization orders increasing 12% [10][26] - New equipment organic sales declined 7%, with EMEA sales growing mid-single digits and APAC approximately 10% [29][30] - Service operating profit increased to $537 million, with operating profit margins expanding 40 basis points to 24.6% [28] Market Data and Key Metrics Changes - Americas new equipment orders grew mid-teens, while Asia Pacific saw orders growth greater than 20%, primarily driven by India and Southeast Asia [15][16] - New equipment orders in China declined greater than 20%, aligning with expectations [15][16] - The total backlog, including maintenance and repair, remains at historically high levels, positioning the company well for future quarters [14] Company Strategy and Development Direction - The company is focused on a service-driven business model, with a strong emphasis on modernization opportunities due to an aging installed base [17][19] - Otis is undergoing transformation initiatives, including Uplift and a China transformation program, aimed at driving process efficiencies and capturing service and modernization opportunities [50][52] - The company anticipates a significant opportunity in modernization, with 8 million units already in the prime modernization age [17] Management's Comments on Operating Environment and Future Outlook - Management expects the new equipment market to stabilize later in 2025, with a projected decline in global new equipment units of mid-single digits for the year [35][36] - The service business, representing approximately 90% of segment operating income, is largely insulated from tariff impacts, with expectations for adjusted free cash flow of approximately $1.6 billion [39][44] - Management remains confident in the service flywheel model and anticipates stronger growth in the second half of the year due to backlog execution and cost savings from transformation initiatives [57][60] Other Important Information - The company announced an 8% increase in its dividend, bringing cumulative dividend increases since the spin-off to approximately 110% [12][44] - Otis completed approximately $250 million in share repurchases during the quarter, with a target of $800 million for 2025 [44][45] Q&A Session Summary Question: Can you provide clarity on the gross headwind from tariffs? - Management indicated that the annualized impact of China tariffs is around $90 million, with mitigation efforts expected to offset half of this impact [66][68] Question: Are you seeing any impact at the local level in China regarding US companies? - Management stated there is no overt targeting of Otis in China and emphasized the importance of maintaining strong local relationships [78] Question: What is the pricing strategy in response to tariffs? - The company has increased prices across new equipment and maintenance services, with a focus on passing inflation costs to customers [80] Question: What is the outlook for new equipment orders in China? - Management expects a sequential improvement in the China market, projecting a decline of approximately 10% in the second half of the year [84] Question: Can you elaborate on the dynamics of the Americas new equipment outlook? - Management noted that while the market in North America was down 9%, Otis's orders grew mid-teens, indicating strong performance and market share gains [124][125]

Core Insights - Otis Worldwide Corporation reported mixed results for Q1 2025, with adjusted earnings exceeding estimates while net sales fell short [1][5] - The company experienced a year-over-year decline in net sales but an increase in adjusted earnings [1] Financial Performance - Adjusted earnings were 92 cents per share, surpassing the Zacks Consensus Estimate of 91 cents by 1.1% and up 5% from 88 cents in the previous year [5] - Net sales totaled $3.35 billion, missing the consensus mark of $3.41 billion by 1.7% and declining 3% year-over-year, with organic sales remaining flat [5] - Adjusted operating margin expanded by 40 basis points to 16.7%, driven by favorable performance in the Service segment [6] Segment Analysis - New Equipment segment net sales were $1.16 billion, down 9% year-over-year, with organic sales declining 7% [7] - Service segment net sales increased 1% year-over-year to $2.19 billion, with organic maintenance and repair sales up 3% and modernization sales up 10% [10] - The backlog for New Equipment decreased by 4% at actual currency and 3% at constant currency [8] Strategic Outlook - Otis aims to focus on innovation and strategic initiatives to enhance growth momentum and shareholder value [3] - The company announced a dividend increase for the fifth consecutive year, reflecting confidence in its strategy [3] Financial Position - Cash and cash equivalents stood at $1.92 billion as of March 31, 2025, down from $2.3 billion at the end of 2024 [13] - Long-term debt decreased to $6.92 billion from $6.97 billion at the end of 2024 [13] - Adjusted free cash flow for the quarter was $186 million, up from $155 million a year ago [13] 2025 Guidance - Otis expects net sales between $14.6 billion and $14.8 billion, indicating approximately 3-4% growth [14] - Adjusted EPS is anticipated to be between $4.00 and $4.10, reflecting a year-over-year growth of 4-7% [15]

Financial Data and Key Metrics Changes - Otis Worldwide Corporation reported net sales of $3.3 billion with organic sales flat year over year [24] - Adjusted operating profit increased by 3% excluding a $16 million foreign exchange headwind, with adjusted operating profit margin expanding by 40 basis points to 16.7% [24][11] - Adjusted EPS grew by 5% or $0.04 in the quarter, driven by solid operational performance and a lower share count [25] Business Line Data and Key Metrics Changes - Service organic sales grew by 4%, with maintenance and repair services increasing by 3% and modernization orders rising by 12% [10][26] - New equipment organic sales declined by 7%, with EMEA sales growing mid-single digits and APAC growing approximately 10% [29][30] - Service operating profit increased to $537 million, with operating profit margins expanding to 24.6% [28] Market Data and Key Metrics Changes - Americas saw strong orders performance, growing mid-teens, while Asia Pacific orders grew greater than 20%, primarily driven by India and Southeast Asia [15][16] - New equipment orders in China declined greater than 20%, aligning with expectations, while EMEA experienced mid-single digit declines [15][16] - The total backlog, including maintenance and repair, remains at historically high levels, positioning the company well for future quarters [14] Company Strategy and Development Direction - The company is focused on service-driven business models and modernization opportunities, with a projected multiyear growth cycle in modernizations due to an aging installed base [17][19] - Otis is implementing transformation initiatives, including Uplift and a China transformation program, to drive process efficiencies and capture service and modernization opportunities [50][52] - The company anticipates adjusted free cash flow of approximately $1.6 billion, primarily returning capital to shareholders through dividends and share repurchases [44] Management's Comments on Operating Environment and Future Outlook - Management expects the global new equipment market to stabilize later in 2025, with a projected decline in new equipment units of mid-single digits for the year [35][36] - The service business, representing approximately 90% of segment operating income, is largely insulated from tariff impacts, with expectations for continued growth [39][40] - Management remains optimistic about the service flywheel model and anticipates stronger growth in the second half of the year due to backlog execution and cost savings realization [57][60] Other Important Information - The company announced an 8% increase in its dividend, bringing cumulative dividend increases since the spin-off to approximately 110% [12][44] - Otis was recognized by Fortune as one of the world's most admired companies and named to the Wall Street Journal's best-managed companies list [12] Q&A Session Summary Question: Can you provide clarity on the gross headwind from tariffs? - Management indicated that the annualized impact of China tariffs is around $90 million, with mitigation efforts expected to offset half of this amount [66][68] Question: Are you seeing any impact at the local level in China regarding US companies? - Management stated that there is no overt targeting of Otis Worldwide Corporation in China, and they continue to develop relationships at all levels of government [78] Question: What is the pricing strategy in response to tariffs? - Management confirmed that they have increased prices across new equipment and maintenance services, with a focus on passing inflation costs to customers [80] Question: What is the outlook for new equipment orders in China? - Management expects the China market to be down 15% in the second quarter, with a gradual improvement anticipated in the second half of the year [84] Question: Can you elaborate on the project delays in the Americas? - Management noted that project delays are primarily due to uncertainty around global trade policies, but they remain optimistic about backlog execution and future orders [122][126]

Otis Worldwide (OTIS) reported $3.35 billion in revenue for the quarter ended March 2025, representing a year-over-year decline of 2.5%. EPS of $0.92 for the same period compares to $0.88 a year ago.The reported revenue compares to the Zacks Consensus Estimate of $3.41 billion, representing a surprise of -1.66%. The company delivered an EPS surprise of +1.10%, with the consensus EPS estimate being $0.91.While investors closely watch year-over-year changes in headline numbers -- revenue and earnings -- and h ...

Q1 2025 Earnings Call April 23, 2025 © 2025 OTIS WORLDWIDE CORPORATION. Forward-Looking Statements Note: All results and expectations in this presentation reflect continuing operations unless otherwise noted. This communication contains statements which, to the extent they are not statements of historical or present fact, constitute "forward-looking statements" under the securities laws. From time to time, oral or written forward-looking statements may also be included in other information released to the p ...

Core Insights - Otis Worldwide Corporation reported first quarter 2025 net sales of $3.3 billion, a decrease of 3% year-over-year, primarily due to a decline in New Equipment sales in China [2][4][20] - The company experienced mid-single digit organic sales growth in its Service segment, contributing to a 40 basis points expansion in operating profit margin [3][5] - GAAP earnings per share (EPS) decreased by 29% to $0.61, while adjusted EPS increased by 5% to $0.92, reflecting solid operational performance [6][22] Financial Performance - Net sales for the first quarter of 2025 were $3.3 billion, down from $3.4 billion in the same quarter of 2024 [4][20] - GAAP operating profit was $411 million, a decrease of $133 million from the previous year, while adjusted operating profit was $560 million, a slight decrease of $1 million [5][20] - The operating profit margin contracted to 12.3% from 15.8% year-over-year, while the adjusted operating profit margin improved to 16.7% from 16.3% [5][20] Segment Performance - The Service segment reported net sales of $2.2 billion, up 1% year-over-year, with organic sales growth of 4% [7][9] - The New Equipment segment saw net sales decline by 9% to $1.2 billion, with significant declines in China and the Americas [10][11] - Orders in the Service segment increased by 12%, contributing to a mid-teens growth in backlog [3][8] Cash Flow and Shareholder Returns - Cash flow from operations was $190 million, an increase from $171 million in the prior year, while adjusted free cash flow rose to $186 million from $155 million [13][30] - The company announced a dividend increase for the fifth consecutive year, reflecting confidence in its strategy and commitment to shareholder value [3][8] 2025 Outlook - Otis revised its full-year outlook, projecting net sales between $14.6 billion and $14.8 billion, with organic sales growth expected between 2% and 4% [16]