Otis Worldwide reports 31% decline in 1Q profits amid slumping China sales; projects tariffs will cost it tens of millions
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An Otis escalator,
Farmington elevator and escalator manufacturer Otis Worldwide Corp. said Wednesday that its first quarter profits fell 31%, driven, in part, by a drop-off in new orders from China.
Otis said its first-quarter profits totaled $243 million, or 61 cents per share, down from $353 million, or 86 cents per share, in the year-ago period.
Its net sales totaled $3.35 billion, down 3% from $3.44 billion in the first quarter of 2024.
The company’s adjusted net income, which excluded non-recurring items, increased 2% to $368 million, or 92 cents per share, compared to $361 million, or 88 cents per share, in the year-ago period.
The non-recurring items included transformation costs and adjustments related to Otis’ separation from its former parent company, United Technologies Corp., now known as Raytheon Technologies.
Purchases of new equipment in China — a major market for Otis — were down 20% in the first quarter, the company said. The decline came as the U.S. government entered a trade war with the East Asian country, as the Trump administration increased tariffs on imported Chinese goods to 145%.
China countered by implementing 125% tariffs on U.S. goods.
President Trump on Tuesday said he expects to strike a trade deal with China that will substantially lower tariff rates.
In the meantime, Otis said current tariff rates will lower its operating profits by $45 million to $75 million.
During the first quarter, Otis’ new equipment business posted sales of $1.2 billion, down 9% from a year ago, and an operating profit of $66 million, down 5% from a year earlier.
The company’s larger service segment posted sales of $2.2 billion, up 1% from a year ago, and an operating profit of $537 million, up 14% from the year-ago period.
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