Elevator and escalator operator Otis Worldwide (OTIS) released its second quarter results, revealing earnings of $1.06 per share beating estimates of $1.03. Revenue was down 3.2% year-over-year to $3.6 billion against an expected $3.73 billion.
Yahoo Finance executive editor Brian Sozzi joins Catalysts to speak with Otis CEO Judy Marks, who provides executive insight into the company’s performance the Chinese market’s impact on the company’s business.
Marks blames challenging times in China for some of the slowdown seen in the report.
“It was our highest margin quarter since we became independent [in 2020] at 17%, with 110 basis points of margin expansion,” Marks explains. “What we’ve seen, though, is some challenges, some challenging economic times in China, specifically in our new equipment segment where volumes are down because consumer sentiment is not driving the property market to return or or really stabilize to a level where people are now continuing to buy real estate. “
Marks elaborates on the potential of the Chinese market as the government still encourages property investments: “There are still over 400 million Chinese living in rural areas that the Chinese government wants to raise from poverty and bring them to urbanized areas. So while the market we’re seeing this year will only be between 425,000 and 450,000 elevator and escalator units available in the new equipment market, it’s still the largest market in the world.”
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This post was written by Nicholas Jacobino