Otis Worldwide Corp · Q3 2022 earnings

Briefing

Otis reported a solid third quarter, driven by mid-single digit organic Service growth.

Otis Worldwide Corporation reported third quarter 2022 net sales of $3.3 billion with 0.8% organic growth. GAAP diluted earnings per share (EPS) of $0.77 was flat versus the prior year and adjusted EPS increased 5.3% to $0.80. The company has revised full-year outlook with organic sales up 2.0 to 2.5%, adjusted EPS of $3.11 to $3.15 and free cash flow of $1.5 to $1.6 billion. Increased full-year share repurchase target to $850 million.

• 3Q Net sales down 7.6% and organic sales up 0.8%.
• GAAP EPS ~flat and adjusted EPS up 5.3%
• 3Q New Equipment orders down 0.8%, up 7.4% excluding China.
• NE backlog ~flat, adjusted backlog up 12% at constant currency

Headline financials

Revenue & EPS history

Otis is revising its full year outlook: • Adjusted net sales of $13.4 to $13.5 billion, down 4 to 4.5% • Organic sales up 2 to 2.5% ◦ Organic New Equipment sales down ~2.5% ◦ Organic Service sales up 6.0 to 6.5% • Adjusted operating profit of approximately $2.1 billion, up $120 to $140 million at constant currency; down $35 million to $55 million at actual currency • Adjusted EPS of $3.11 to $3.15, up 5 to 7%; adjusted effective tax rate of 26.5 to 26.7% • Free cash flow of $1.5 to $1.6 billion with conversion of approximately 125% of GAAP net income • Share repurchases of $850 million