Newly independent elevator maker Otis Worldwide Corp. on Thursday reported a nearly 40% drop in first-quarter profits as global demand for elevators and repair services declined amid the coronavirus pandemic.
In response to the headwinds, the farmington-based company has enacted a global hiring freeze, reduced executive pay and furloughed some employees, according to CEO Judy Marks.
Marks told shareholders Thursday that Otis, which officially split from its former parent company United Technologies Corp. (now Raytheon Technologies Corp.) April 3, expects sales to decline up to 7% in 2020, amid COVID-19-related drops in demand and delays in equipment installations.
“We are not immune to the broader economic impact as this pandemic spreads across the globe,” Marks said.
Otis’ profits in the first three months of 2020 reached $165 million, or 38 cents per diluted share, down from $273 million, or 63 cents per diluted share, in the year-ago period.Â
Otis’ $2.9 billion in first-quarter sales were down 4.4% from a year ago.
Otis CFO Raul Ghai said pandemic-related shutdowns have caused delays in installations and other on-site work. Other factors impacting the company during the quarter included fluctuations in commodity prices, reduction in construction demand and shifts in global supply and demand, according to the company.
Otis’ stock was trading at $51.60 around 11:50 a.m.. up nearly 7% from Wednesday’s close.
