Elevator and escalator maker revised its 2026 outlook after modernization orders rose 9% at constant currency and adjusted EPS fell 4% to $1.01.
Otis Worldwide Corporation reported second-quarter 2026 net sales of $3.9 billion, up 7% from a year earlier, with organic sales up 6% as growth in Service offset weaker New Equipment trends. Service net sales rose 11%, with organic growth of 9%, matching the highest level since the company’s spin, while modernization and repair posted double-digit gains and maintenance growth accelerated. GAAP EPS increased 13% to $1.12, while adjusted EPS fell 4% to $1.01. The quarter showed a split between Otis’ higher-margin service operations and its more cyclical equipment business. Service sales reached $2.6 billion, with organic maintenance and repair sales up 6% and organic modernization sales up 24%. New Equipment sales were flat at $1.3 billion, with roughly 10% organic growth in the Americas and low single-digit growth in Asia Pacific offset by a high-teens decline in China and a mid-single-digit decline in EMEA. New Equipment orders fell 5% at constant currency, though modernization orders increased 9% at constant currency and modernization backlog climbed 24%, or 26% at constant currency. GAAP operating profit rose by $28 million to $575 million, helped mainly by the absence of UpLift transformation costs, separation-related adjustments and other non-recurring items recorded in the prior year. Adjusted operating profit fell by $25 million to $587 million, while adjusted operating margin declined 180 basis points to 15.2%, reflecting weaker New Equipment performance, corporate adjustments, and investment in service growth initiatives. Operating cash flow was $267 million and adjusted free cash flow was $290 million in the quarter, while share repurchases totaled about $400 million. For the first half of 2026, net sales rose 7% and organic sales increased 4%, with Service net sales up 11% and organic Service sales up 7%. Otis said it is revising its full-year outlook to net sales of $15.1 billion to $15.3 billion, organic sales growth in the low to mid-single digits, adjusted operating profit of about $2.4 billion, adjusted EPS of $4.01 to $4.05, and adjusted free cash flow of $1.50 billion to $1.55 billion.