Otis Worldwide Corporation (NYSE:OTIS) shares gained 3.15% in premarket trading Wednesday after the elevator and escalator manufacturer reported third-quarter earnings that beat analyst forecasts, powered by continued strength in its service business.
The company posted adjusted earnings of $1.05 per share, topping the $1.00 consensus estimate. Revenue rose 4% year-over-year to $3.7 billion, exceeding the expected $3.66 billion, with organic sales up 2% and service revenue growing 6% on an organic basis.
The service segment remained the key driver of growth, with net sales up 9% and the operating profit margin expanding 70 basis points to 25.5%. Otis also expanded its maintenance portfolio by 4%, while modernization orders jumped 27% at constant currency.
“Otis returned to growth as we delivered strong performance. Our Service flywheel generated our highest organic sales growth and operating profit margin expansion this year with our industry leading maintenance portfolio growing 4%,” said Judy Marks, Chair, CEO & President of Otis Worldwide.
By contrast, the New Equipment segment saw a 4% decline in sales from the previous year, with operating profit slipping to $59 million, down from $84 million a year ago — a result of lower demand in China and the Americas.
Otis raised the midpoint of its full-year adjusted EPS outlook to $4.04–$4.08, implying 5–7% annual growth, and reaffirmed net sales guidance of $14.5–$14.6 billion, up about 2% year-over-year.
Year-to-date, the company has repurchased $800 million of its stock and generated $766 million in adjusted free cash flow.
The positive investor response underscores confidence in Otis’s service-driven growth model, which continues to offset softness in new equipment markets, particularly in China.