Q1 2025 Otis Worldwide Corp Earnings Call Transcript
Key Points
- Otis Worldwide Corp (OTIS) reported a 5% growth in adjusted EPS for the first quarter, driven by solid growth in service and margin expansion.
- The company announced an 8% increase in its dividend, marking a cumulative dividend increase of approximately 110% since its spin-off.
- Modernization orders increased by 12%, with a backlog up 14% at constant currency, indicating strong future growth potential.
- The service segment showed resilience with a 4% organic sales growth, supported by a 40 basis points expansion in adjusted operating margin.
- Otis Worldwide Corp (OTIS) was recognized by Fortune as one of the world's most admired companies and named to Wall Street Journal's Best Managed Companies list, reflecting strong corporate reputation and management.
- New equipment organic sales declined by 7% in the quarter, with significant declines in China and the Americas.
- The company faces a potential $45 million to $75 million negative impact on operating profit in 2025 due to tariffs on Chinese imports.
- Despite strong performance in other regions, new equipment orders in China declined by more than 20%, aligning with expectations of market stabilization later in the year.
- The repair growth was muted in the first quarter, up only low single digits, due to timing of backlog execution.
- Otis Worldwide Corp (OTIS) anticipates a mid-single-digit decline in global new equipment units for the year, with particular weakness expected in the Asia region.
Good morning, and welcome to Otis' first-quarter 2025 earnings conference call. This call is being carried live on the Internet and recorded for replay. Presentation materials are available for download from Otis' website at www.otis.com. I'll now turn the call over to Rob Quartaro, Vice President of Investor Relations. Please go ahead.
Thank you, Jayel. Welcome to Otis' first-quarter 2025 Earnings Conference Call. On the call with me today are Judy Marks, Chair, CEO and President; and Cristina Mendez, Executive Vice President and CFO. Please note, except where otherwise noted, the company will speak to results from continuing operations excluding restructuring and significant non-recurring items. A reconciliation of these measures can be found in the appendix of the webcast.
We also remind listeners that the presentation contains forward-looking statements, which are subject to risks and uncertainties. Otis' SEC filings,
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