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A Dive into Otis Worldwide (OTIS) International Revenue Trends and Forecasts

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Did you analyze how Otis Worldwide (OTIS - Free Report) fared in its international operations for the quarter ending March 2024? Given the widespread global presence of this company, scrutinizing the trends in international revenues becomes imperative to assess its financial strength and future growth possibilities.

In the current global economy, which is more interconnected than ever, a company's success in penetrating international markets is crucial for its financial health and growth journey. Investors must understand a company's dependence on overseas markets, as this offers a window into the company's earnings stability, its ability to benefit from varied economic cycles and its potential for long-term growth.

Being present in foreign markets serves as protection against local economic declines and helps benefit from more rapidly expanding economies. Yet, such expansion also introduces challenges related to currency fluctuations, geopolitical uncertainties and varied market behaviors.

Our review of OTIS' last quarterly performance uncovered some notable trends in the revenue contributions from its international markets, which are commonly analyzed and tracked by Wall Street experts.

The recent quarter saw the company's total revenue reaching $3.44 billion, marking an improvement of 2.7% from the prior-year quarter. Next, we'll examine the breakdown of OTIS' revenue from abroad to comprehend the significance of its international presence.

A Look into OTIS' International Revenue Streams

Other International generated $1.95 billion in revenues for the company in the last quarter, constituting 56.7% of the total. This represented a surprise of +4.39% compared to the $1.87 billion projected by Wall Street analysts. Comparatively, in the previous quarter, Other International accounted for $1.99 billion (55.1%), and in the year-ago quarter, it contributed $1.87 billion (55.9%) to the total revenue.

Of the total revenue, $425 million came from China during the last fiscal quarter, accounting for 12.4%. This represented a surprise of -27.55% as analysts had expected the region to contribute $586.62 million to the total revenue. In comparison, the region contributed $612 million, or 16.9%, and $501 million, or 15%, to total revenue in the previous and year-ago quarters, respectively.

Projected Revenues in Foreign Markets

The current fiscal quarter's total revenue for Otis Worldwide, as projected by Wall Street analysts, is expected to reach $3.83 billion, reflecting an increase of 3.1% from the same quarter last year. The breakdown of this revenue by foreign region is as follows: Other International is anticipated to contribute 53.9% or $2.07 billion and China 17.6% or $674.46 million.

Analysts expect the company to report a total annual revenue of $14.71 billion for the full year, marking an increase of 3.5% compared to last year. The expected revenue contributions from Other International and China are projected to be 54.2% ($7.98 billion) and 17.2% ($2.54 billion) of the total revenue, in that order.

Wrapping Up

Otis Worldwide's leaning on foreign markets for its revenue stream presents a mix of chances and challenges. Therefore, a vigilant watch on its international revenue movements can greatly aid in projecting the company's future direction.

In an era of growing international interdependencies and escalating geopolitical disputes, Wall Street analysts are vigilant in tracking these trends for businesses with a global reach, in order to refine their predictions of earnings. It should be noted, however, that a multitude of other elements, such as a company's domestic position, also play a significant role in shaping the earnings forecasts.

At Zacks, we place significant importance on a company's evolving earnings outlook. This is based on empirical evidence demonstrating its strong influence on a stock's short -term price movements. Invariably, there exists a positive relationship -- an upward revision in earnings estimates is typically mirrored by a rise in the stock price.

Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.

Currently, Otis Worldwide holds a Zacks Rank #3 (Hold), signifying its potential to match the overall market's performance in the forthcoming period. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Reviewing Otis Worldwide's Recent Stock Price Trends

Over the past month, the stock has lost 7.1% versus the Zacks S&P 500 composite's 2% decrease. The Zacks Construction sector, of which Otis Worldwide is a part, has declined 5.4% over the same period. The company's shares have increased 1.4% over the past three months compared to the S&P 500's 4.6% increase. Over the same period, the sector has risen 9.7%.

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