(Reuters) -Elevator maker Otis Worldwide beat Wall Street estimates for the third quarter on Wednesday, driven by a 27% rise in modernization orders, which supported strong growth in its services segment.
Shares of the company were up nearly 3% before the bell.
The tariff-resistant services segment continued to see growing demand for maintenance, repair, and modernization for its existing equipment, such as elevators and escalators, resulting in an 8.7% rise in segment net sales from a year ago.
The company also revised its annual adjusted profit to range between $4.04 and $4.08 per share, with a midpoint of $4.06. Its earlier view ranged between $4 and $4.10 per share, with a midpoint of $4.05.
“A strong order book for modernization and recovery in New Equipment gives us confidence to increase the midpoint of our EPS outlook,” said CEO Judy Marks.
Wall Street analysts expect annual adjusted profit of $4.02, according to LSEG compiled data.
In its largest market China, the services segment is also seeing higher demand due to aging equipment. In its equipment segment, Otis expects some recovery in the country with help from government subsidies, as the Chinese property market recovers.
However, for the quarter ended September 30, net sales in the equipment segment decreased 4% as sales declines in China and the Americas offset growth in Asia Pacific and EMEA markets.
Total quarterly net sales rose 4% to $3.69 billion, compared with estimates of $3.65 billion.
The Farmington, Connecticut-based company posted quarterly adjusted profit of $1.05 per share, compared with analysts’ estimates of $1 per share.
(Reporting by Aatreyee Dasgupta in Bengaluru; Editing by Vijay Kishore)
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