Otis Worldwide Corporation (NYSE:OTIS), the leading manufacturer of elevators and escalators, saw its shares decline sharply by 10.79% in premarket trading on Wednesday following its Q2 earnings announcement, as revenue missed analyst expectations despite strong service segment performance.
The company reported adjusted earnings per share of $1.05, slightly exceeding the forecast of $1.03, but revenue came in at $3.6 billion, falling short of the $3.7 billion consensus. Organic sales dropped 2% year-over-year.
The weaker-than-expected revenue was mainly due to a 10% year-over-year decline in the New Equipment segment, with organic sales down 11%. This downturn was most significant in China, where sales decreased by over 20%, and in the Americas, which experienced a mid-to-high single-digit sales decline.
“Otis delivered solid performance led by the strength of our Service segment that continues our steady growth trajectory, and contributed mid-single digit organic sales growth and both year over year and sequential operating profit margin expansion,” said Judy Marks, Chair, CEO, and President.
The Service division, which accounts for a larger share of Otis’s revenue, was a bright spot with net sales rising 6% and organic growth of 4% year-over-year. Service operating profit margin expanded 20 basis points to 24.9%.
For the full year 2025, Otis maintained its adjusted EPS guidance of $4.00 to $4.10, consistent with analyst expectations of $4.08. However, the company revised its annual revenue forecast to $14.5 billion to $14.6 billion, slightly below the $14.71 billion consensus estimate.
During the quarter, Otis’s maintenance portfolio grew 4%, while modernization orders increased 22% on a constant currency basis, with backlog up 16%. New Equipment orders, excluding China, rose 11%, though overall New Equipment orders declined 1% on a constant currency basis.
In the first half of 2025, the company repurchased roughly $550 million of its shares and reported adjusted free cash flow of $429 million.
Otis Worldwide Corporation stock price
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