Newly-independent Farmington elevator maker Otis Worldwide Corp. improved its sales outlook for the year, even as it posted an $84 million decline in profits in 2020’s second quarter, largely due to COVID-19 restrictions.
Otis, which officially split from its former parent company United Technologies Corp. (now Raytheon Technologies Corp.) April 3, now expects 2020 sales will be down 2% to 4% in 2020. That’s an improvement from the company’s previous prediction of a sales drop of 3% to 7%.
Major reasons for the outlook improvement are an uptick of job sites that had been closed due to COVID-19 building closures, Otis CEO Judy Marks said during a Tuesday morning earnings call. About 90% of Otis’ new equipment installation job sites are open, compared with a low point of 65% last quarter, Marks said. Additionally, activity in China looks encouraging.
“By June we saw encouraging signs of improvement in many regions,” Marks said. “In the new equipment business we expect substantial recovery in China in the second quarter.”
Otis posted a second-quarter profit of $224 million, or 52 cents per diluted share, an $84 million drop from 2019’s second quarter, when Otis reported a $308 million profit, or 71 cents per diluted share.
The company’s $3 billion in second quarter sales was down $322 million from the same period last year, when Otis sold about $3.4 billion in products and services.
“Both the new equipment and service segments declined… in the second quarter primarily from the impact of COVID-19,” CFO Raul Ghai said.
During the call, Marks also told investors that Otis has pledged its executive staff will be 50% women by 2030, as part of joining the Paradigm for Parity campaign, a coalition of business leaders dedicated to addressing the corporate leadership gender gap.
Marks also talked up new Otis products, including IoT (internet of things) devices like touchless elevator technologies.Â
“We have a clear roadmap to continue to enhance the capability of our iot solutions over the next several months,” Marks said.Â
