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Jun 30, 2022
Otis Q2 2022 Earnings Report
Otis delivered solid second quarter results with high teens New Equipment order growth, mid-single digit organic Service sales growth and low teens adjusted EPS growth
Key Takeaways
Otis reported second quarter 2022 net sales of $3.5 billion with 0.4% organic growth. GAAP diluted earnings per share (EPS) of $0.76 was flat versus the prior year and adjusted EPS increased 11.7% to $0.86.
2Q Net sales down 5.8% and organic sales up 0.4%.
GAAP EPS ~flat and adjusted EPS up 11.7%
2Q New Equipment orders up 16.5%; NE backlog up 6%, adjusted backlog up 10% at constant currency
Completed the delisting of Zardoya Otis and reached an agreement to divest our Russia business with closing expected imminently
Otis
Otis
Otis Revenue by Segment
Revenue by Segment
Service Revenue
CapyFin.comNew Equipment Revenue
CapyFin.com Forward Guidance
Otis expects to deliver 2.5 to 3.5% organic sales growth, high single digit adjusted EPS growth and $1.6 billion in free cash flow in 2022.
Positive Outlook
- Organic sales up 2.5 to 3.5%
- Organic Service sales up 5.5 to 6.5%
- Adjusted operating profit of $2.1 to $2.2 billion, up $120 to $150 million at constant currency
- Adjusted EPS of $3.17 to $3.21, up 7 to 9%
- Adjusted effective tax rate of 26.5 to 26.7%
Challenges Ahead
- Adjusted net sales of $13.6 to $13.8 billion, down 2 to 3%
- Organic New Equipment sales down 0.5 to 1.0%
- Adjusted operating profit of $2.1 to $2.2 billion, up $5 million to down $25 million at actual currency
- Free cash flow of ~$1.6 billion with conversion of approximately 125% of GAAP net income
- Net sales decreased 5.8% versus the prior year with a 0.4% increase in organic sales that was more than offset by a 5.3% headwind from foreign exchange
Revenue & Expenses
Visualization of income flow from segment revenue to net income