Otis Worldwide has revised its 2024 net sales forecast downward due to weaker demand for new equipment in North America and China. The company reported an 11.4% drop in quarterly net sales for new equipment, totaling USD 1.42 billion, influenced by slowed U.S. construction and a sluggish Chinese property market. Otis now projects full-year net sales between USD 14.3 billion and USD 14.5 billion, down from USD 14.5 billion to USD 14.8 billion. Despite a 3.2% decrease in total net sales to USD 3.6 billion, Otis increased its profit forecast and reported an adjusted profit of USD 1.06 per share, above expectations.
Otis Worldwide has adjusted its 2024 net sales forecast downward, citing weaker demand for new equipment in North America and China. The company, known for its elevators and escalators, reported an 11.4% drop in quarterly net sales for its new equipment segment, totaling USD 1.42 billion.
The decline in sales growth is attributed to slower construction activity in the U.S. caused by inflationary pressures and a sluggish recovery in China's property market. As a result, Otis now expects its full-year net sales to range between USD 14.3 billion and USD 14.5 billion, a reduction from the previous forecast of USD 14.5 billion to USD 14.8 billion.
Despite the drop in new equipment sales, Otis' services segment, which includes maintenance and product upgrades, saw a 3% increase, reaching USD 2.18 billion. This segment's steady demand partly offset the overall decline.
Overall, Otis reported a 3.2% decrease in total net sales to USD 3.6 billion for the second quarter, falling short of the average analyst estimate of USD 3.73 billion. However, the company raised its lower profit forecast for the year to between USD 3.85 and USD 3.90 per share, slightly above the previous range of USD 3.83 to USD 3.90. In the quarter ending June 30, Otis reported an adjusted profit of USD 1.06 per share, surpassing the expected USD 1.03.
The revised forecast highlights ongoing challenges in the global construction and real estate markets, impacting equipment demand but showing resilience in service-related areas.
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