United Tech's Otis Unveils Guidance, Targets Ahead of Spinoff
February 11 2020 - 10:47AM
Dow Jones News
By Colin Kellaher
Otis Worldwide Corp., the elevator maker being spun off by
United Technologies Corp., Tuesday unveiled its 2020 guidance and
medium-term financial targets.
In an investor presentation, Otis said it expects sales of $13.1
billion to $13.3 billion this year, compared with $13.1 billion in
2019.
The company expects organic sales growth of 2% to 3% for the
year, and said it expects its adjusted operating profit will rise
by $40 million to $70 million over last year's $1.9 billion.
Over the medium term, Otis said it is targeting organic sales
growth in the low- to mid-single digits, high-single-digit adjusted
per-share earnings growth, and 110% to 120% free cash flow
conversion.
Otis also said it is targeting a roughly 40% dividend payout
ratio and said it plans to repay about $250 million in debt in both
2020 and 2021. The company said it expects to have about $1.3
billion in cash and $6.1 billion in debt at the time of the
spinoff, which is slated to occur early in the second quarter.
United Technologies is spinning off Otis and its Carrier Global
Corp. unit into separate, publicly traded companies as part of a
transformation that also involves a $135 billion deal to combine
its Collins Aerospace and Pratt & Whitney units with Raytheon
Co. to create Raytheon Technologies Corp.
Otis said its shares will trade under the symbol OTIS on the New
York Stock Exchange, where the company originally listed nearly 100
years ago. United technologies acquired Otis in 1976.
Write to Colin Kellaher at colin.kellaher@wsj.com
(END) Dow Jones Newswires
February 11, 2020 10:32 ET (15:32 GMT)
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