Otis Worldwide Corporation (OTIS)

Otis Worldwide Corp. announced its Q1 2025 earnings, with GAAP EPS falling short of expectations and Non-GAAP EPS surpassing estimates; revenue also missed projections. In Q4 2024, Otis showed mixed results with strong service segment growth offsetting challenges in new equipment, achieving 1.9% organic sales growth. The company increased its quarterly dividend by 7.7% to $0.42 per share. The stock price has increased in the last month and over the past six months. Challenges in the Chinese new equipment market are expected to lead to further declines in new equipment orders in 2025, while the service market remains resilient.

Otis Worldwide Corp.'s business model includes new equipment sales, maintenance, and modernization. The service segment provides stable, high-margin, and recession-resistant cash flows, accounting for a significant portion of sales and operating profit. Otis maintains a large portfolio of elevators under maintenance contracts, with a high renewal rate. Modernization opportunities are a significant driver, and the overall growth of the vertical transportation industry is tied to urbanization and global economic expansion. Historically, Otis's free cash flow generation has been strongest in the second and fourth quarters.

Otis Worldwide Corp. is a global leader in the vertical transportation industry, specializing in elevators, escalators, and moving walkways, and provides installation, maintenance, repair, and modernization services. The company operates within the Industrials sector, focusing on New Equipment and Service segments. The New Equipment segment includes various types of elevators and escalators, while the Service segment offers maintenance contracts, retrofit solutions, and digital monitoring technologies.

Otis has a significant global presence, operating in over 200 countries and territories, with a direct presence in more than 70 countries and over 1,400 branches and offices. In 2022, Asia-Pacific contributed 35% of revenue, North America 28%, Europe 24%, and the Rest of World 13%. New equipment sales in China and the Americas each accounted for approximately one-third of the company's new equipment net sales, with China representing over half of the global new equipment unit volume.

Otis Worldwide Corp. has maintained a strong brand reputation, being recognized by Fortune magazine as one of the "World's Most Admired Companies" for the fourth consecutive year. The company has also been acknowledged by Newsweek as one of America's Most Responsible Companies and the World's Most Trustworthy Companies, and by Forbes as one of the World's Best Employers. The company reported the loss of Otis colleagues and subcontractor partners on job sites due to work-related incidents.

Otis Worldwide Corp. is predominantly owned by institutional investors, holding between 77.02% and 90.62% of the company's shares. Vanguard Group Inc. is the largest individual shareholder. Individual owners hold a smaller portion, with insiders owning a small percentage.