Shares of elevator maker Otis Worldwide pop on COVID-19 rebound news

 Shares of elevator maker Otis Worldwide pop on COVID-19 rebound news

A large maker of elevators, escalators and moving walkways is seeing worldwide demand bounce back so fast following last year’s COVID slump that it’s increasing its dividend by 20 percent.

Otis Worldwide reported on Monday that first-quarter sales rose by 15 percent as business roared back to life. It sees that demanding continuing for the rest of the year. And the company, which was recently tapped to help modernize Three Times Square, sees the surge in demand continuing all year.

“This positive momentum combined with continued progress in executing our strategy and recovery in the end markets gives us confidence to improve our 2021 outlook, raise dividends by 20 percent and increase our share repurchase target to half a billion dollars, demonstrating our ongoing commitment to create value for our shareholders,” CEO Judy Marks said.

The positive news sent shares of Farmington, Conn., company up more than seven percent on Monday to $76.37, a $2.2 billion gain.

That’s a huge jump from this time last year when the pandemic sent Otis’ shares down to $47.85 as COVID-related issues in the factory and restricted access to job sites depressed sales.

Otis sign
Otis is also increasing its dividend by 20 percent.
Toronto Star via Getty Images

“Now, with those things not being as much of an issue we saw a big jump, especially in the Americas,” an Otis exec said on Monday.

Otis reported first-quarter net sales of $3.4 billion, 14.9 percent higher than the prior year’s quarter. Otis said 10.3 percent of the growth was organic, or not the result of backlog.

“I think it goes beyond just our performance,” the exec said. “I think we’re seeing all the indicators now starting to turn whether that’s the ABI, the Architectural Billings Index [an index of non-residential construction], which in March, was at a record since the 2007 time frame.”  

The company used the call to boast about big project wins in the quarter. In addition to its Three Times Square, known as the Thomson Reuters building, Otis will also be supplying more than 1,000 elevators for a new metropolis near Beijing for residential communities and was chosen to install 92 escalators for the Munich metro it said.

Panoramic elevators built by Otis.
First-quarter net sales were $3.4 billion.
Jochen Eckel/picture-alliance/dp

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