Factors Setting the Tone for Otis Worldwide (OTIS) Q4 Earnings

Otis Worldwide Corporation OTIS is scheduled to report fourth-quarter 2022 results on Feb 1, before the opening bell.

In the last-reported quarter, OTIS’ earnings beat the Zacks Consensus Estimate by 2.6% and rose 5.3% year over year. Net sales missed the consensus mark by 2.8% and declined 7.6% year over year.

Otis’ earnings topped the consensus mark in all the last 11 quarters.

Trend in Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for earnings per share has increased to 73 cents from 72 cents over the past 60 days. The estimated figure indicates a 1.4% increase from the year-ago quarter’s level. The consensus mark for net sales is pegged at $3.31 billion, suggesting a 7.1% decrease from the year-ago reported figure of $3.57 billion.

Otis Worldwide Corporation Price and EPS Surprise

Otis Worldwide Corporation Price and EPS Surprise

Otis Worldwide Corporation price-eps-surprise | Otis Worldwide Corporation Quote

Key Factors to Note

The world's leading elevator and escalator manufacturing, installation and service company is expected to have registered higher earnings in the fourth quarter despite lower sales. Solid New Equipment backlog level, increasing service portfolio, acquisitions, product innovations and new technologies through continuous research and development are expected to have contributed to the quarterly performance.

However, headwinds like commodity inflation and currency are likely to have added to the woes.

Despite these headwinds, a positive segment mix, strong Service performance and cost containment are expected to add to the bottom line.

New Equipment is expected to have registered lower revenues in the fourth quarter. The Zacks Consensus Estimate for New Equipment revenues is pegged at $1.38 billion, which indicates a decrease of 11.6% from $1.56 billion in the year-ago period.

For Service, revenues are expected to have decreased in the quarter to be reported. The Zacks Consensus Estimate for Service revenues is pegged at $1.92 billion, which indicates a slight fall of 4.1% from $2 billion in the year-ago period.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Otis this time around. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is the case here, as elaborated below.

Earnings ESP: Otis has an Earnings ESP of +0.69%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: Currently, Otis carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Recent Construction Release

United Rentals, Inc.’s URI fourth-quarter 2022 results earnings and revenues missed the Zacks Consensus Estimate but increased on a year-over-year basis on the back of sustained demand in its end markets and the strength of its core rental business.

URI provided solid full-year 2023 guidance for total revenues and adjusted EBITDA, given broad-based end-market activity, contractor backlogs, customer sentiment and solid visibility. Also, it unveiled a quarterly dividend of $1.48 per share, with an annualized yield of approximately 1.5%. The company also plans to restart its share repurchase program, with the intention to buyback $1 billion of common stock in 2023.

Stocks With Favorable Combination

Here are some companies in the Zacks Construction sector, which according to our model, have the right combination of elements to beat on earnings in their respective quarters to be reported.

Boise Cascade Company BCC has an Earnings ESP of +0.90% and carries a Zacks Rank #3.

BCC’s earnings topped the consensus mark in all the last four quarters, with the average surprise being 30.9%.

Fluor Corporation FLR has an Earnings ESP of +2.48% and carries a Zacks Rank #2.

FLR’s earnings topped the consensus mark in one of the last four quarters but missed on three occasions, with the average negative surprise being 38.2%.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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Fluor Corporation (FLR) : Free Stock Analysis Report

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Boise Cascade, L.L.C. (BCC) : Free Stock Analysis Report

Otis Worldwide Corporation (OTIS) : Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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