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Can Otis Worldwide (OTIS) Report Higher Earnings in Q1?
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Otis Worldwide Corporation (OTIS - Free Report) is scheduled to report first-quarter 2022 results on Apr 25, before the opening bell.
In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 5.9% and rose 9.1% year over year. Net sales marginally missed the consensus mark but improved 2.2% year over year, backed by solid segmental results.
Otis’ earnings topped the consensus mark in all the last eight quarters.
The Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has been stable at 75 cents in the past 60 days. The estimated figure indicates 4.2% growth from the year-ago quarter’s level. The consensus mark for net sales is pegged at $3.43 billion, suggesting a 0.7% increase from the year-ago reported figure of $3.41 billion.
The world's leading elevator and escalator manufacturing, installation and service company is expected to have registered slightly higher year-over-year sales and earnings in the first quarter. The upside can be attributed to favorable service pricing and productivity initiatives in both New Equipment and Service segments.
Strong organic sales, margin expansion across the segments, a strong business strategy and robust data and technology-based innovations are expected to have contributed to its quarterly results. Otis has been focusing on improving the business on the back of various strategies like acquisitions, product innovations, and new technologies through continuous research and development.
Yet, headwinds like commodity inflation and the absence of temporary cost actions are likely to have put pressure on the bottom line. The company expects tough organic growth in the new equipment business in the to-be-reported quarter. Also, currency headwinds are likely to have weighed on first-quarter performance due to the pricey euro.
New Equipment is expected to have sequentially stronger in the first quarter. Yet, the Zacks Consensus Estimate for New Equipment revenues is pegged at $1,432 million, which indicates a decrease of 1.8% from $1,458 million in the year-ago period.
For Service, revenues are expected to have increased strongly in the quarter to be reported. The Zacks Consensus Estimate for Service revenues is pegged at $2,003 million, which indicates an increase of 2.7% from $1,950 million in the year-ago period.
The consensus mark for adjusted operating profit for the New Equipment unit indicates a fall of 14.7%, while that of Service suggests 4.8% year-over-year growth.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Otis this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Here are some companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Summit Materials, Inc. (SUM - Free Report) has an Earnings ESP of +5.26% and sports a Zacks Rank #1.
SUM’s earnings topped the consensus mark thrice but missed the same on the other occasion, with the average surprise being 7.5%. Earnings for the to-be-reported quarter are expected to decline 15.2% year over year.
PotlatchDeltic Corporation (PCH - Free Report) has an Earnings ESP of +7.24% and holds a Zacks Rank #2.
PCH’s earnings topped the consensus mark in all the last four quarters, with the average being 6.4%. Earnings for the to-be-reported quarter are expected to grow 18.8% year over year.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +6.64% and a Zacks Rank #2.
KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 10.4%. Earnings for the to-be-reported quarter are expected to grow 10.3% year over year.
Image: Bigstock
Can Otis Worldwide (OTIS) Report Higher Earnings in Q1?
Otis Worldwide Corporation (OTIS - Free Report) is scheduled to report first-quarter 2022 results on Apr 25, before the opening bell.
In the last reported quarter, the company’s earnings beat the Zacks Consensus Estimate by 5.9% and rose 9.1% year over year. Net sales marginally missed the consensus mark but improved 2.2% year over year, backed by solid segmental results.
Otis’ earnings topped the consensus mark in all the last eight quarters.
The Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has been stable at 75 cents in the past 60 days. The estimated figure indicates 4.2% growth from the year-ago quarter’s level. The consensus mark for net sales is pegged at $3.43 billion, suggesting a 0.7% increase from the year-ago reported figure of $3.41 billion.
Otis Worldwide Corporation Price and EPS Surprise
Otis Worldwide Corporation price-eps-surprise | Otis Worldwide Corporation Quote
Key Factors to Note
The world's leading elevator and escalator manufacturing, installation and service company is expected to have registered slightly higher year-over-year sales and earnings in the first quarter. The upside can be attributed to favorable service pricing and productivity initiatives in both New Equipment and Service segments.
Strong organic sales, margin expansion across the segments, a strong business strategy and robust data and technology-based innovations are expected to have contributed to its quarterly results. Otis has been focusing on improving the business on the back of various strategies like acquisitions, product innovations, and new technologies through continuous research and development.
Yet, headwinds like commodity inflation and the absence of temporary cost actions are likely to have put pressure on the bottom line. The company expects tough organic growth in the new equipment business in the to-be-reported quarter. Also, currency headwinds are likely to have weighed on first-quarter performance due to the pricey euro.
New Equipment is expected to have sequentially stronger in the first quarter. Yet, the Zacks Consensus Estimate for New Equipment revenues is pegged at $1,432 million, which indicates a decrease of 1.8% from $1,458 million in the year-ago period.
For Service, revenues are expected to have increased strongly in the quarter to be reported. The Zacks Consensus Estimate for Service revenues is pegged at $2,003 million, which indicates an increase of 2.7% from $1,950 million in the year-ago period.
The consensus mark for adjusted operating profit for the New Equipment unit indicates a fall of 14.7%, while that of Service suggests 4.8% year-over-year growth.
What the Zacks Model Unveils
Our proven model doesn’t conclusively predict an earnings beat for Otis this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here.
Earnings ESP: The company has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Zacks Rank: Currently, Otis carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
Stocks With Favorable Combination
Here are some companies in the Zacks Construction sector, which according to our model, have the right combination of elements to post an earnings beat in their respective quarters to be reported.
Summit Materials, Inc. (SUM - Free Report) has an Earnings ESP of +5.26% and sports a Zacks Rank #1.
SUM’s earnings topped the consensus mark thrice but missed the same on the other occasion, with the average surprise being 7.5%. Earnings for the to-be-reported quarter are expected to decline 15.2% year over year.
PotlatchDeltic Corporation (PCH - Free Report) has an Earnings ESP of +7.24% and holds a Zacks Rank #2.
PCH’s earnings topped the consensus mark in all the last four quarters, with the average being 6.4%. Earnings for the to-be-reported quarter are expected to grow 18.8% year over year.
KBR, Inc. (KBR - Free Report) has an Earnings ESP of +6.64% and a Zacks Rank #2.
KBR’s earnings topped the consensus mark in all the last four quarters, with the average being 10.4%. Earnings for the to-be-reported quarter are expected to grow 10.3% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.