Copyright Benzinga
Otis Worldwide Corp. (NYSE:OTIS) shares traded higher on Wednesday after the company announced its third-quarter 2025 results, which topped Wall Street expectations and raised confidence in its earnings outlook, driven by robust growth in its high-margin Service business. The elevator and escalator maker reported net sales of $3.69 billion, surpassing the analyst estimate of $3.65 billion, with organic sales growth of 2% year over year. Adjusted earnings per share rose 9% to $1.05, topping expectations of $1.00, while GAAP EPS fell 29% to 95 cents. "Our Service flywheel generated our highest organic sales growth and operating profit margin expansion this year with our industry leading maintenance portfolio growing 4%," Chair, CEO, and president Judy Marks said. Also Read: Xylem Raises Outlook As CEO Hails Resilient Demand And Record Profit Margins "These strong results illustrate the strength of our Service-driven strategy. This, coupled with a strong order book for modernization and recovery in New Equipment, gives us confidence to increase the midpoint of our EPS outlook," she added. Segment Performance The Service segment delivered net sales of $2.43 billion, up 9% with 6% organic growth. Segment operating profit rose $66 million to $621 million, and operating margin expanded 70 basis points to 25.5% on higher volume, favorable pricing, and productivity gains. Modernization orders climbed 27% at constant currency, and the backlog increased 22%. New Equipment net sales fell 4% to $1.3 billion, with an organic sales decline of 5%, driven by a roughly 20% drop in China and a high-single-digit decline in the Americas. Segment operating profit fell $25 million to $59 million, and margin contracted 170 basis points to 4.7%. New Equipment orders rose 4% at constant currency, or 7% excluding China. Cash Flow and Capital Allocation Year-to-date operating cash flow totaled $779 million, and adjusted free cash flow was $766 million. Otis repurchased about $800 million of shares year to date and ended the quarter with $840 million in cash and $8.1 billion in total debt. Outlook For full-year 2025, Otis reaffirmed its net sales guidance of $14.5 billion to $14.6 billion, consistent with the $14.514 billion analyst estimate, representing a year-over-year increase of approximately 2%, with organic growth of around 1%. Organic Service sales are expected to rise roughly 5%, while New Equipment sales are projected to decline about 7%. The company narrowed its adjusted EPS outlook to $4.04–$4.08, compared with estimates of $4.02, and guided for adjusted free cash flow of approximately $1.45 billion. Otis said it continues executing its UpLift program, targeting $200 million in run-rate savings and $40 million from its China transformation program by year-end. Price Action: OTIS shares were trading higher by 2.97% to $94.01 premarket at last check Wednesday. Read Next: Teradyne Shares Jump Over 23% Pre-Market Amid Strong Q3 Results Photo by ZikG via Shutterstock
