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Otis Worldwide Expects Service Segment to Drive Sales Growth


By Will Feuer

Elevator-and-escalator maker, Otis Worldwide, anticipates its service segment to be a key driver of sales growth in 2024, despite the impact of high interest rates on new construction. In the fourth quarter, the Farmington, Conn.-based company reported a profit of $323 million, or 79 cents a share, compared with $297 million, or 71 cents a share, in the same period a year earlier. Adjusted earnings per share came to 87 cents, surpassing analysts’ expectations of 86 cents.

Sales also saw a boost, rising more than 5% to $3.62 billion, exceeding analysts’ estimates of $3.57 billion. Notably, the company’s service segment experienced impressive organic sales growth of 6.8%, while the new-equipment unit remained stagnant.

Looking ahead to 2024, Otis has set a sales target of $14.5 billion to $14.8 billion, reflecting a projected annual growth rate of 2% to 4%. This slightly missed analysts’ forecast of $14.63 billion. The company expects adjusted earnings for the year to be in the range of $3.80 to $3.90 per share, within close proximity to the $3.83 per share that analysts had expected.

For future sales growth, Otis is placing its confidence in the service segment once again. It foresees organic service sales to increase by 6% to 7% in 2024, while organic sales in the new-equipment unit are predicted to remain largely unchanged.

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