United Tech's Otis Unveils Guidance, Targets Ahead of Spinoff

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 [e-mail]

(END) Dow Jones Newswires

February 11, 2020 10:32 ET (15:32 GMT)

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