Otis Earnings: Resilience in Early 2024 Despite the Return of New Equipment Order Weakness

Wide-moat Otis Worldwide delivered a solid first-quarter result, illustrating the resilience of the industry-leading elevator original equipment manufacturer’s installed base business model amid a still soft environment for construction activity and demand for new elevator installations. First-quarter sales grew 3.8% organically and adjusted EBIT rose 8.3% year on year as Otis’ high profit margin service segment performed strongly. Otis has consequently tightened its 2024 guidance range, now expecting to deliver 3%-5% organic sales growth in 2024 and operating profit in the range of $2.42 billion-$2.46 billion. We’ve tweaked our estimates in response to the first-quarter result and now forecast full-year 2024 EBIT of $2.45 billion and EPS of $3.99.