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In the last reported quarter, OTIS’ earnings beat the Zacks Consensus Estimate by 9.2% and rose 18.8% year over year. Net sales beat the consensus mark by 1.2% and gained 5.4% year over year.
Otis’ earnings topped the consensus mark in each of the last 15 quarters.
Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has been stable at 85 cents in the past 60 days. The estimated figure indicates a rise of 13.3% from the year-ago quarter.
The consensus mark for net sales is pegged at $3.57 billion, suggesting a 3.9% increase from the year-ago reported figure of $3.44 billion.
Key Factors to Note
The world's leading elevator and escalator manufacturing, installation and service company’s fourth-quarter 2023 results are likely to be aided by strong volume, favorable pricing and improved productivity.
Otis Worldwide is boosting business performance by implementing a range of strategies, including acquisitions, product innovations and the integration of new technologies, driven by ongoing research and development efforts. These initiatives are expected to contribute positively to the fourth-quarter results.
The company projects the new equipment margin to be nearly 7% in the fourth quarter compared with 4.9% in the year-ago period. It expects new equipment orders to be down in the low to mid-single-digit and the backlog to be flat to slightly up in the to-be-reported quarter. China's backlog is likely to be down in the mid-single-digit.
Our model predicts New Equipment revenues to grow 1.8% year over year to $1.49 billion.
OTIS projects the margin for Service in the fourth quarter to be approximately 23.2%, down from the prior year's quarter’s 23.9%. Within Services, the company assumes repair to be flattish and modernization to grow in double-digits in the quarter.
Service revenues will rise 5.6% to $2.09 billion compared with the prior year, per our estimate.
Also, it anticipates headwinds from foreign exchange translation to impact sales and thereby adjusted earnings in the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model does not 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, as elaborated below.
Earnings ESP: Otis 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 #4 (Sell).
Stocks With the Favorable Combination
Here are some companies in the Zacks Construction sector that, per our model, have the right combination of elements to beat on earnings in the quarter to be reported.
LPX’s earnings for the to-be-reported quarter are expected to decline 14.8%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 98.3%.
Meritage Homes Corporation (MTH - Free Report) has an Earnings ESP of +2.85% and carries a Zacks Rank #3.
MTH’s earnings topped the consensus mark in each of the last four quarters, with the average being 25.8%. Earnings for the to-be-reported quarter are expected to decline 26.9% year over year.
Vulcan Materials Company (VMC - Free Report) has an Earnings ESP of +1.85% and carries a Zacks Rank #3.
VMC’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 13.6%. Earnings for the to-be-reported quarter are expected to grow 25.9% year over year.
Image: Bigstock
Otis Worldwide (OTIS) to Post Q4 Earnings: What's in Store?
Otis Worldwide Corporation (OTIS - Free Report) is scheduled to report fourth-quarter 2023 results on Jan 31, before the opening bell.
In the last reported quarter, OTIS’ earnings beat the Zacks Consensus Estimate by 9.2% and rose 18.8% year over year. Net sales beat the consensus mark by 1.2% and gained 5.4% year over year.
Otis’ earnings topped the consensus mark in each of the last 15 quarters.
Trend in Estimate Revision
For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has been stable at 85 cents in the past 60 days. The estimated figure indicates a rise of 13.3% from the year-ago quarter.
Otis Worldwide Corporation Price and EPS Surprise
Otis Worldwide Corporation price-eps-surprise | Otis Worldwide Corporation Quote
The consensus mark for net sales is pegged at $3.57 billion, suggesting a 3.9% increase from the year-ago reported figure of $3.44 billion.
Key Factors to Note
The world's leading elevator and escalator manufacturing, installation and service company’s fourth-quarter 2023 results are likely to be aided by strong volume, favorable pricing and improved productivity.
Otis Worldwide is boosting business performance by implementing a range of strategies, including acquisitions, product innovations and the integration of new technologies, driven by ongoing research and development efforts. These initiatives are expected to contribute positively to the fourth-quarter results.
The company projects the new equipment margin to be nearly 7% in the fourth quarter compared with 4.9% in the year-ago period. It expects new equipment orders to be down in the low to mid-single-digit and the backlog to be flat to slightly up in the to-be-reported quarter. China's backlog is likely to be down in the mid-single-digit.
Our model predicts New Equipment revenues to grow 1.8% year over year to $1.49 billion.
OTIS projects the margin for Service in the fourth quarter to be approximately 23.2%, down from the prior year's quarter’s 23.9%. Within Services, the company assumes repair to be flattish and modernization to grow in double-digits in the quarter.
Service revenues will rise 5.6% to $2.09 billion compared with the prior year, per our estimate.
Also, it anticipates headwinds from foreign exchange translation to impact sales and thereby adjusted earnings in the to-be-reported quarter.
What the Zacks Model Unveils
Our proven model does not 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, as elaborated below.
Earnings ESP: Otis 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 #4 (Sell).
Stocks With the Favorable Combination
Here are some companies in the Zacks Construction sector that, per our model, have the right combination of elements to beat on earnings in the quarter to be reported.
Louisiana-Pacific Corporation (LPX - Free Report) has an Earnings ESP of +6.64% and carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.
LPX’s earnings for the to-be-reported quarter are expected to decline 14.8%. The company reported better-than-expected earnings in three of the last four quarters and missed on one occasion, the average surprise being 98.3%.
Meritage Homes Corporation (MTH - Free Report) has an Earnings ESP of +2.85% and carries a Zacks Rank #3.
MTH’s earnings topped the consensus mark in each of the last four quarters, with the average being 25.8%. Earnings for the to-be-reported quarter are expected to decline 26.9% year over year.
Vulcan Materials Company (VMC - Free Report) has an Earnings ESP of +1.85% and carries a Zacks Rank #3.
VMC’s earnings topped the consensus mark in three of the last four quarters and missed on one occasion, with the average being 13.6%. Earnings for the to-be-reported quarter are expected to grow 25.9% year over year.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.