Otis Worldwide Outperforms Expectations in Q1 Earnings Report as Net Sales Continue to Grow

By Thomas Price Monday, April 26, 2021

As corporate and apartment buildings all over the world continue to modernize, more elevators are being installed every year. Otis Worldwide is the company that is taking the lion’s share of this demand, with the elevator company seeing tremendous business growth in its Q1 earnings report. The elevator business saw overall growth in total revenue as well as earnings per share, beating out analyst expectations for the fifth straight quarter in a row. Shares for the company are up early as a result in pre-market trading.

Otis United Technologies service van.

Otis Worldwide Earnings vs. Expectations

In the Q1 earnings report released by the company, Otis Worldwide generated $3.4 billion in total revenue. In comparison to the same quarter last year, business has picked up significantly, with Otis Worldwide only reporting $2.9 billion during the 2020 fiscal year. The increase in business by the company translates to an overall growth in revenues of 14.9%. The elevator company also reported a 10.3% increase in organic sales.

Otis Worldwide also saw its GAAP operating profit increase from just $329 million last year to $509 million in this quarter. Earnings were also up, with the adjusted figure reaching $0.72 per share. The elevator business saw a whopping 20% increase from the same quarter a year prior as the profit margins for the company continue to grow. This figure also beat out expectations from Wall Street analysts who estimated that Otis Worldwide would only report earnings of $0.62 per share.

New Equipment made up the largest portion of new business for the company as revenues within the sector grew by 29.8% as organic sales increased by 25.1%. Otis Worldwide also saw growth in the service portion of its business as well, growing by 5.8%. These points of new business helped raise 2021 guidance as well as provided a spark at the stock market.

Future Outlook and Stock Market Reaction

As a result of such a successful Q1 earnings report, the elevator company has improved its outlook for the rest of its fiscal year. In fact, Otis Worldwide now expects to earn between $13.6 billion and $13.9 billion over the course of 2021. The business also projects an annual earnings per share between $2.78 and $2.84. The strength of the Q1 report, alongside the new updated 2021 guidance, has helped bump Otis Worldwide in premarket trading.

In fact, company stock is up over 4% this morning as investors see strong growth potential moving down the line. Otis Worldwide is now worth over $74 per share, reaching an all-time high in stock prices.

In a statement released alongside the Q1 earnings report, president and CEO of Otis Worldwide, Judy Marks, said, “Otis had an excellent start to the year. Our New Equipment orders were up high teens, including growth in every region, and we saw increased organic sales and margin expansion in both segments. Continued robust cash flow generation enabled us to buy back $300 million of shares early in the year. This positive momentum combined with continued progress in executing our strategy and recovery in the end markets gives us confidence to improve our 2021 outlook, raise dividends by 20 percent and increase our share repurchase target to half a billion dollars, demonstrating our ongoing commitment to create value for our shareholders.”

About the Author

Headshot for author Thomas Price

Tom Price is a writer focusing on Entertainment and Sports Features. He has a degree from NYU in English with a minor in Creative Writing. He has been previously published for Washington Square News, Dignitas, CBR, and Numbers on the Boards.

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