Elevator/escalator titan Otis Worldwide (OTIS) - Get OTIS WORLDWIDE CORPORATION Report Monday lifted its estimate for the impact of commodity-price inflation on its results to four times its estimate from February.
This represents the third increase for the estimate, MarketWatch reports. Soaring steel prices in particular have hit Otis hard.
Chief Financial Officer Rahul Ghai said on Otis’s earnings conference call that “headwinds from commodity [inflation] are now expected to be between $80 million to $90 million for the year.”
In February, Ghai said commodity prices “could be like a $20-million plus headwind” in 2021, after serving as a “tailwind” in 2020, MarketWatch reports. The forecast was $70 million to $80 million in July.
Otis shares at last check were trading off 1.4% at $80.68. They'd risen 21% in 2021 through Monday's close.
The company also reported Monday that third-quarter results surpassed forecasts, and it boosted full-year guidance, despite the commodity issue.
Profit registered $331 million, or 77 cents a share, up from $266 million, or 61 cents a share. Adjusted earnings reached 77 cents a share from 69 cents, topping analysts’ projection of 73 cents derived from a FactSet survey.
Revenue climbed 11% from a year earlier to $3.62 billion, beating the FactSet analyst consensus of $3.55 billion.
Otis boosted its estimate for full-year 2021 adjusted earnings per share to about $2.95 from a range of $2.89 to $2.93.
It increased its forecast for net sales to about $14.3 billion from a range of $14.1 billion to $14.2 billion.