We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Otis Worldwide Corporation (OTIS - Free Report) reported mixed results in first-quarter 2024, wherein its earnings surpassed the Zacks Consensus Estimate but net sales missed the same. The top and bottom lines grew on a year-over-year basis.
Its quarterly results reflected 14 consecutive quarters of organic sales growth and the results were marked by a high-teens growth in adjusted earnings per share (EPS). Thanks to the strength in modernization, the company witnessed orders growth of more than 10%, leading to mid-teens backlog growth.
Otis has been leveraging its Service-driven business model and intends to focus on enhancing its operational performance and shareholder value through a capital-allocation strategy and pursue additional progress toward ESG goals.
Abiding by its commitment to enhance shareholder value on the back of its accretive strategies, Otis announced a 14.7% hike in its quarterly dividend payment to 39 cents per share. The dividend will be paid on Jun 7, 2024, to shareholders as of May 17, 2024.
Shares of this elevator and escalator manufacturing company inched up 0.3% in the pre-market trading session on Apr 24.
Inside the Headlines
The company reported quarterly earnings of 88 cents per share, surpassing the Zacks Consensus Estimate of 87 cents by 1.1% and increasing 10% from the year-ago quarter’s figure of 80 cents. The upside was mainly driven by operational improvement, a lower share count and effective tax rate improvement.
Otis Worldwide Corporation Price, Consensus and EPS Surprise
Adjusted operating margin expanded 80 basis points (bps) to 16.3% from the year-ago period’s level, backed by favorable segment performance and mix. Our model predicted the adjusted operating margin to expand 70 bps year over year to 16.2%.
Segment Details
New Equipment’s net sales of $1.28 billion fell 2.1% from the prior-year period. Organic sales declined 0.5%, which was accompanied by a 1.6% headwind from foreign exchange. Our model predicted organic sales for the New Equipment segment to decline 1.1% in the quarter.
New Equipment orders were down 10% at constant currency. Growth in EMEA and Asia Pacific was more than offset by softness in the Americas and China. The New Equipment’s backlog at constant currency was flat year over year in the quarter.
Segment operating margin was up 20 bps year over year at 5.5%.
Service’s net sales increased 5.8% to $2.16 billion year over year. A 6.5% rise in organic sales and a 0.8% benefit from foreign exchange helped the top line. Organic maintenance and repair sales grew 5.8% and organic modernization sales rose 9.7% from the year-ago quarter. Our model predicted organic sales for the Service segment to grow 6.4% in the quarter.
Modernization orders were up 12.9% at constant currency during the reported quarter. Modernization backlog at constant currency increased 15% year over year.
Segment operating margin registered an improvement of 70 bps year over year to 24.2%, driven by higher volume, favorable pricing and productivity, partially offset by annual wage inflation.
Financial Position
Otis had cash and cash equivalents of $884 million as of Mar 31, 2024, down from $1.27 billion reported in 2023 end. Long-term debt was $6.85 billion as of Mar 31, 2024, down from $6.87 billion in 2023 end.
Net cash flows provided by operating activities were $171 million for the March quarter, down from $278 million a year ago.
Adjusted free cash flow (“FCF”) totaled $155 million for the quarter, down from $253 million a year ago.
Updated 2024 Guidance
For 2024, the company expects net sales to be nearly $14.5-$14.8 billion. The new projection indicates approximately 2-4% growth. Organic sales growth is projected to be 3-5% (flat for New Equipment and up 6-7% for Service).
Adjusted operating profit is now projected to be $160-$190 million, up from the prior expectation of $150-$190 million at constant currency.
Adjusted EPS is now anticipated to be between $3.83 and $3.90, (priorly expected $3.80-$3.90). The updated outlook suggests 8-10% year-over-year growth.
Adjusted FCF is still expected to be $1.6 billion.
PulteGroup Inc. (PHM - Free Report) reported stellar results in first-quarter 2024, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Also, both metrics increased year over year on favorable demand conditions and its balanced operating model, which allows the company to more effectively meet the individual needs of first-time, move-up and active-adult consumers.
The number of homes closed increased 11% to 7,095 units from the year-ago level. The average selling price of homes delivered was $538,000, down 1.3% year over year. New home orders gained 14% year over year to 8,379 units for the quarter, benefiting from higher gross orders and a lower cancelation rate. The value of new orders also rose 24% from a year ago to $4.7 billion.
D.R. Horton, Inc. (DHI - Free Report) reported second-quarter fiscal 2024 (ended Mar 31, 2024) results, with earnings and revenues surpassing Zacks Consensus Estimate. On a year-over-year basis, both the top and bottom lines increased.
The upside was backed by the supply of new and existing homes as affordable price points remain limited and robust housing demand is supported by favorable demographics amid elevated inflation and mortgage/interest rates. Home closings rose 15% from the year-ago quarter to 22,548 homes. Net sales orders were up 14% year over year to 26,456 homes. The cancellation rate (on gross sales orders) was 15%, down from 18% a year ago.
RPM International Inc. (RPM - Free Report) reported third-quarter fiscal 2024 (ended Feb 29, 2024) results, with earnings and sales beating the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis.
In the fiscal third quarter, sales soared to an all-time high, buoyed by favorable pricing across all sectors, effectively offsetting inflationary pressures. Particularly robust was the volume growth in sectors catering to infrastructure, reshoring initiatives and high-performance construction projects, thanks to tailored engineered solutions. Additionally, the timely completion of projects contributed significantly to this surge.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
OTIS Q1 Earnings Beat, Organic Sales Up, '24 View Raised
Otis Worldwide Corporation (OTIS - Free Report) reported mixed results in first-quarter 2024, wherein its earnings surpassed the Zacks Consensus Estimate but net sales missed the same. The top and bottom lines grew on a year-over-year basis.
Its quarterly results reflected 14 consecutive quarters of organic sales growth and the results were marked by a high-teens growth in adjusted earnings per share (EPS). Thanks to the strength in modernization, the company witnessed orders growth of more than 10%, leading to mid-teens backlog growth.
Otis has been leveraging its Service-driven business model and intends to focus on enhancing its operational performance and shareholder value through a capital-allocation strategy and pursue additional progress toward ESG goals.
Abiding by its commitment to enhance shareholder value on the back of its accretive strategies, Otis announced a 14.7% hike in its quarterly dividend payment to 39 cents per share. The dividend will be paid on Jun 7, 2024, to shareholders as of May 17, 2024.
Shares of this elevator and escalator manufacturing company inched up 0.3% in the pre-market trading session on Apr 24.
Inside the Headlines
The company reported quarterly earnings of 88 cents per share, surpassing the Zacks Consensus Estimate of 87 cents by 1.1% and increasing 10% from the year-ago quarter’s figure of 80 cents. The upside was mainly driven by operational improvement, a lower share count and effective tax rate improvement.
Otis Worldwide Corporation Price, Consensus and EPS Surprise
Otis Worldwide Corporation price-consensus-eps-surprise-chart | Otis Worldwide Corporation Quote
Net sales of $3.44 billion missed the consensus mark by 0.2% but rose 2.7% on a year-over-year basis. Organically, net sales rose 3.8% year over year for the quarter. Currency headwinds benefited sales by 1.2%.
Adjusted operating margin expanded 80 basis points (bps) to 16.3% from the year-ago period’s level, backed by favorable segment performance and mix. Our model predicted the adjusted operating margin to expand 70 bps year over year to 16.2%.
Segment Details
New Equipment’s net sales of $1.28 billion fell 2.1% from the prior-year period. Organic sales declined 0.5%, which was accompanied by a 1.6% headwind from foreign exchange. Our model predicted organic sales for the New Equipment segment to decline 1.1% in the quarter.
New Equipment orders were down 10% at constant currency. Growth in EMEA and Asia Pacific was more than offset by softness in the Americas and China. The New Equipment’s backlog at constant currency was flat year over year in the quarter.
Segment operating margin was up 20 bps year over year at 5.5%.
Service’s net sales increased 5.8% to $2.16 billion year over year. A 6.5% rise in organic sales and a 0.8% benefit from foreign exchange helped the top line. Organic maintenance and repair sales grew 5.8% and organic modernization sales rose 9.7% from the year-ago quarter. Our model predicted organic sales for the Service segment to grow 6.4% in the quarter.
Modernization orders were up 12.9% at constant currency during the reported quarter. Modernization backlog at constant currency increased 15% year over year.
Segment operating margin registered an improvement of 70 bps year over year to 24.2%, driven by higher volume, favorable pricing and productivity, partially offset by annual wage inflation.
Financial Position
Otis had cash and cash equivalents of $884 million as of Mar 31, 2024, down from $1.27 billion reported in 2023 end. Long-term debt was $6.85 billion as of Mar 31, 2024, down from $6.87 billion in 2023 end.
Net cash flows provided by operating activities were $171 million for the March quarter, down from $278 million a year ago.
Adjusted free cash flow (“FCF”) totaled $155 million for the quarter, down from $253 million a year ago.
Updated 2024 Guidance
For 2024, the company expects net sales to be nearly $14.5-$14.8 billion. The new projection indicates approximately 2-4% growth. Organic sales growth is projected to be 3-5% (flat for New Equipment and up 6-7% for Service).
Adjusted operating profit is now projected to be $160-$190 million, up from the prior expectation of $150-$190 million at constant currency.
Adjusted EPS is now anticipated to be between $3.83 and $3.90, (priorly expected $3.80-$3.90). The updated outlook suggests 8-10% year-over-year growth.
Adjusted FCF is still expected to be $1.6 billion.
Zacks Rank & Some Recent Construction Releases
Otis currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PulteGroup Inc. (PHM - Free Report) reported stellar results in first-quarter 2024, wherein earnings and revenues surpassed the Zacks Consensus Estimate. Also, both metrics increased year over year on favorable demand conditions and its balanced operating model, which allows the company to more effectively meet the individual needs of first-time, move-up and active-adult consumers.
The number of homes closed increased 11% to 7,095 units from the year-ago level. The average selling price of homes delivered was $538,000, down 1.3% year over year. New home orders gained 14% year over year to 8,379 units for the quarter, benefiting from higher gross orders and a lower cancelation rate. The value of new orders also rose 24% from a year ago to $4.7 billion.
D.R. Horton, Inc. (DHI - Free Report) reported second-quarter fiscal 2024 (ended Mar 31, 2024) results, with earnings and revenues surpassing Zacks Consensus Estimate. On a year-over-year basis, both the top and bottom lines increased.
The upside was backed by the supply of new and existing homes as affordable price points remain limited and robust housing demand is supported by favorable demographics amid elevated inflation and mortgage/interest rates. Home closings rose 15% from the year-ago quarter to 22,548 homes. Net sales orders were up 14% year over year to 26,456 homes. The cancellation rate (on gross sales orders) was 15%, down from 18% a year ago.
RPM International Inc. (RPM - Free Report) reported third-quarter fiscal 2024 (ended Feb 29, 2024) results, with earnings and sales beating the Zacks Consensus Estimate. Both metrics increased on a year-over-year basis.
In the fiscal third quarter, sales soared to an all-time high, buoyed by favorable pricing across all sectors, effectively offsetting inflationary pressures. Particularly robust was the volume growth in sectors catering to infrastructure, reshoring initiatives and high-performance construction projects, thanks to tailored engineered solutions. Additionally, the timely completion of projects contributed significantly to this surge.