Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
Please consider a small donation if you think this website provides you with relevant information
| Statement |
|---|
| It's a very healthy margin rate |
| Asia Pacific grew low-teens driven by continued performance in India, as well as traction with major projects |
| We grew organic sales 5.2% with growth in both segments, expanded operating profit margin 60 basis points, and achieved 19% adjusted EPS growth |
| This marks the 11th consecutive quarter of service organic sales growth, and the 15th quarter where our service operating profit margin has expanded, demonstrating the consistency in our execution and the strength of our strategy |
| With our fourth consecutive quarter of maintenance portfolio growth above 4% and backlog growth in both new equipment and modernization, we have set ourselves up nicely for the future |
| Right now, price cost is favorable, and we are able to offset the China mix as you saw in third quarter with a new equipment margin being at 7.2% |
| So, you know, nice call out, America's, EMEA, Asia Pacific, really good revenue growth, as you saw in Anurag's presentation |
| Adjusted operating profit growth at constant currency is expected to be $170 million, a $5 million increase versus the prior guide's midpoint, and the result of strong performance in the service segment |
| It's the mix, we -- I mean, we are very encouraged |
| I mean, the performance in third quarter margin was fantastic |
| We've grown our new equipment and Mod backlogs, expanded the portfolio at 4% and delivered over 10% EPS growth |
| So put all of that together, it gives us confidence there's going to be another good price increase next year on top of our portfolio growth, which should mean that our maintenance business should grow mid-single-digit plus |
| Taken together, these initiatives drive further value for our customers, organizational effectiveness, and sustainable profitable growth |
| But new equipment is our highest margin in China and I think what you see with the results is despite China being down, our other three regions really picked it up nicely for us to be able to hold margins at 7% on new equipment for the quarter and to grow organically 1% even with China down fairly significantly |
| What I do like about the Americas beyond their performance, and they really had a strong performance in terms of backlog conversion, is we still have strong mid-single-digit backlog on new equipment |
| So we're actually feeling pretty good about service pricing for next year and price cost |
| It could be around the mid-single-digit level again, so that's really encouraging |
| So we feel pretty good about the pricing increase in Europe next year |
| In service, modernization orders remain strong, up 13% in Q3 |
| The fifth consecutive quarter of Mod orders grew at above 10%, driven by strong performance in EMEA, China, and Asia Pacific |
| And I think, I know we've treated them fairly and we're able to recover that in both price and productivity |
| With adjusted operating profit growth of $47 million in the quarter, we expanded margins by 60 basis points, driven by 90 basis points of service adjusted operating profit margin expansion |
| Service adjusted operating profit margin expanded 90 basis points in the quarter to 24.8% |
| To summarize, we executed our strategy, growing the portfolio above 4%, increasing our new equipment and Mod backlogs, giving us a strong base to execute on for the next several quarters, while expanding operating profit margins as we drive a consistent operating cadence in the business, ultimately leading to just under 20% EPS growth |
| It's growing at a very good rate |
| That puts us in a really good position, not just for the fourth quarter, but I would tell you with our cycle time in the Americas, it gives us really good line of sight for the next 12 to 18 months, especially in North America, which is the majority of our Americas business |
| And that's why we're convinced the service-driven growth strategy globally is the right answer for us and our shareholders |
| Maintenance and repair was up 8.6% from higher than anticipated repair volumes, and Mod was up 7.6% with growth across all regions highlighted by a double-digit increase in Asia |
| Our strong year-to-date performance gives us confidence to again raise our EPS outlook and deliver a solid fourth quarter, while positioning us well to perform in ‘24 and beyond |
| Service revenue came in better-than-expected with all lines of business contributing to organic sales growth of 8.4% |
| Statement |
|---|
| While Americas, we now expect to decline mid-teens and China to decline north of 10%, both worse than we were anticipating just a few months ago, as the macro environment remains challenging |
| In China, the new equipment market does remain somewhat weak, and it's worse than we saw it a quarter ago when we told you we didn't see that inflection point for book and ship |
| In the third quarter, at constant currency, new equipment orders declined 10% versus prior year |
| I would tell you the residential, it performed the worst in the third quarter, followed by commercial not being great and infrastructure for the quarter being relatively flat |
| Judy Marks Yes, so I mean, that multifamily was our, from a market perspective, a segment perspective, was the worst performing in the U.S |
| But let's assume that the market goes down next year and then China is probably down 5% |
| In total, this would leave global new equipment bookings somewhere around 850,000 units, down approximately 10% versus 2022 |
| You know, the China market itself is really down north of 10% |
| China backlog is down low-single-digits |
| So we now believe the new equipment market in the Americas is going to be down mid-teens, and we're really seeing that with the highest impact being the interest rates remaining high |
| If you look at what we did this year, we more than overcame that through the service business, which is why we, you know, our guide bent up every quarter because of lack of service |
| Right now China backlog is down low-single-digit |
| We anticipate that EMEA will decline high-single-digits in line with our expectations for last quarter |
| But China's now about a 17% of our total revenue down from 20% traditionally |
| So, you know, one element is, you know, if I just, maybe it's some incorrect math’s, but it looks like the service margin in Q4 in the guide is down sequentially off flat sales and sort of flattish year-on-year, despite a big increase year-to-date |
| We now expect new equipment organic sales growth of approximately 3% at the low-end of the prior range driven by larger than expected headwinds in China, which we expect to be down mid-single-digits |
| Although pricing was down mid-single-digits in China due to macro challenges, we remained price cost neutral in the region from our continued focus on driving material productivity |
| It could be down mid-single-digit by end of the year |
| So you've been, you know, feeding off a good backlog there and the organic sales maybe flat to up 1% year-on-year in new equipment in the back half of the current year? I just wondered though when you look at the sort of 12-month rolling on new equipment orders down 4%, year-to-date down 6%, last quarter down 10%, and then we think about sort of the nature of how quickly the backlog wears off |
| Now, it's down off record highs for multiple years, and there's still demand for it, but we're just seeing the developers slow down on the start button, which is when we get those advances that Anurag was talking about in his cash answer |
Please consider a small donation if you think this website provides you with relevant information