We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Otis Worldwide Q3 Earnings & Net Sales Beat Estimates, Stock Up
Read MoreHide Full Article
Key Takeaways
Otis Worldwide's Q3 adjusted EPS rose 9.4% to $1.05, surpassing consensus estimates.
Service sales grew 9% on strong maintenance and modernization demand, lifting margins.
New Equipment sales fell 4%, but EPS guidance midpoint was raised amid solid momentum.
Otis Worldwide Corporation (OTIS - Free Report) reported impressive results in the third quarter of 2025, wherein adjusted earnings and net sales surpassed the Zacks Consensus Estimate. On a year-over-year basis, the top and bottom lines increased.
The quarterly results were supported by year-over-year growth in contributions from the Service segment, partially offset by a soft sales trend in the New Equipment segment. The Service segment grew, driven by increased trends in organic maintenance and repair sales and organic modernization sales, supporting the overall performance.
The company’s performance underscores the continued success of its Service-focused strategy. A strong modernization pipeline and improving trends in the New Equipment segment reinforced overall momentum, prompting the company to raise the midpoint of its EPS guidance.
Following the results, OTIS stock gained 3.8% during today’s pre-market trading session.
Inside OTIS’ Q3 Headlines
The company reported adjusted earnings of $1.05 per share, which beat the Zacks Consensus Estimate of $1 by 5%. The reported figure increased 9.4% from the year-ago quarter’s EPS of 96 cents.
Net sales of $3.69 billion topped the consensus mark of $3.65 billion by 1.2% and increased 4% on a year-over-year basis. Organically, net sales were up 2% year over year. Favorable foreign exchange movement supported sales growth by 2%.
Otis Worldwide Corporation Price, Consensus and EPS Surprise
Adjusted operating margin expanded 20 basis points year over year to 17.1%. The result indicates reduced contributions from the New Equipment segment, mostly offset by growth in the Service segment. Our model predicted the adjusted operating margin to remain flat year over year.
Segment Details of OTIS
Service: The net sales of this segment increased 9% year over year to $2.43 billion. A 6% rise in organic sales was accompanied by a 6% favorable foreign exchange movement. Organic maintenance and repair sales increased 4% and organic modernization sales rose 14% from the year-ago quarter. Our model estimated organic sales for the segment to grow 5.9%. Modernization backlog at constant currency increased 22% year over year.
Segment operating margin expanded 70 bps year over year to 25.5%, due to higher volume, favorable pricing and productivity, partially offset by inflationary pressures including higher labor costs and mix.
New Equipment: This segment’s net sales of $1.26 billion fell 4% from the prior-year period. Organic sales declined 5%. Our model predicted organic sales for the New Equipment segment to decline 6.4%.
New Equipment orders were up 4% at constant currency, driven by high-teens growth in EMEA and mid-single-digit growth in the Americas. These gains were partially offset by a mid-single-digit decline in China and a slight decline in Asia Pacific. The segment’s backlog decreased 2% at actual currency and 1% at constant currency. Excluding China, backlog increased 7% at actual currency and 8% at constant currency.
Segment operating margin contracted 170 bps year over year to 4.7%. The downtrend was due to impacts of lower volume, unfavorable price, tariff headwinds and mix, which was partially offset by productivity tailwinds and other restructuring actions.
Financial Position of OTIS
Otis Worldwide had cash and cash equivalents of $840 million as of Sept. 30, 2025, down from $2.3 billion reported at 2024-end. Long-term debt increased to $7.59 billion as of the third-quarter end from $6.97 billion at 2024-end.
Net cash flows provided by operating activities were $779 million as of the first nine months of 2025, down from $873 million a year ago.
Adjusted free cash flow (“FCF”) totaled $766 million at the end of the first nine months, down from $889 million a year ago.
OTIS Revises 2025 Guidance
The company still expects net sales to be between $14.5 billion and $14.6 billion. The projection indicates approximately 2% year-over-year growth. Organic sales growth is projected to be approximately 1%.
Organic New Equipment sales are expected to be down about 7%. Organic Service sales are expected to be up nearly 5%.
Adjusted operating profit is still expected to be between $2.4 billion and $2.5 billion, now reflecting an increase of $65-$85 million at constant currency, excluding a tariff impact of approximately ($30) million and an increase of $75-$95 million at actual currency, including tariff impacts.
Adjusted EPS is now anticipated to be between $4.04 and $4.08 compared with the previously expected range of $4.00-$4.10.The projection indicates 5-7% year-over-year growth.
Adjusted FCF is now expected to be approximately $1.45 billion compared with the previously expected range of $1.4 billion and $1.5 billion. OTIS expects the adjusted effective tax rate to be approximately 24.8%.
PulteGroup Inc. (PHM - Free Report) has reported better-than-expected third-quarter 2025 results, wherein adjusted earnings and total revenues handily beat the Zacks Consensus Estimate. However, the metrics declined year over year.
The performance of PulteGroup was hurt during the quarter due to the current softness in the housing market because of weaker consumer confidence and ongoing affordability challenges. Moreover, increases in direct costs related to home and land sales hurt the bottom line, alongside a decline in revenues. Nonetheless, with a diversified business platform, PulteGroup aims to counter the macro challenges and position itself for better growth prospects in the upcoming period.
KB Home (KBH - Free Report) reported third-quarter fiscal 2025 results. The quarter’s earnings and total revenues surpassed the Zacks Consensus Estimate but decreased on a year-over-year basis.
KB Home’s quarterly results highlighted ongoing challenges in a difficult housing market, reflecting pricing pressures across key regions. In response to weaker demand and the shortfall in orders, management adopted a cautious stance and revised its fiscal 2025 housing revenue guidance downward. KB Home is focused on expanding its build-to-order mix, reducing build times and enhancing customer satisfaction through affordable prices and personalization while maintaining strict cost controls.
Lennar Corporation (LEN - Free Report) reported dismal results for the third quarter of fiscal 2025, wherein its adjusted earnings and total revenues missed the Zacks Consensus Estimate. Also, both metrics tumbled on a year-over-year basis.
The quarter’s performance was adversely impacted by the softness in the housing market due to ongoing affordability challenges and a decline in consumer confidence. To counter the affordability issues, Lennar’s initiative of lowering the ASP adversely impacted revenue growth during the quarter. Nonetheless, Lennar is focusing on scale and technology investments to drive cost efficiencies. A strong balance sheet and disciplined execution are expected to support margin improvement as conditions stabilize.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Otis Worldwide Q3 Earnings & Net Sales Beat Estimates, Stock Up
Key Takeaways
Otis Worldwide Corporation (OTIS - Free Report) reported impressive results in the third quarter of 2025, wherein adjusted earnings and net sales surpassed the Zacks Consensus Estimate. On a year-over-year basis, the top and bottom lines increased.
The quarterly results were supported by year-over-year growth in contributions from the Service segment, partially offset by a soft sales trend in the New Equipment segment. The Service segment grew, driven by increased trends in organic maintenance and repair sales and organic modernization sales, supporting the overall performance.
The company’s performance underscores the continued success of its Service-focused strategy. A strong modernization pipeline and improving trends in the New Equipment segment reinforced overall momentum, prompting the company to raise the midpoint of its EPS guidance.
Following the results, OTIS stock gained 3.8% during today’s pre-market trading session.
Inside OTIS’ Q3 Headlines
The company reported adjusted earnings of $1.05 per share, which beat the Zacks Consensus Estimate of $1 by 5%. The reported figure increased 9.4% from the year-ago quarter’s EPS of 96 cents.
Net sales of $3.69 billion topped the consensus mark of $3.65 billion by 1.2% and increased 4% on a year-over-year basis. Organically, net sales were up 2% year over year. Favorable foreign exchange movement supported sales growth by 2%.
Otis Worldwide Corporation Price, Consensus and EPS Surprise
Otis Worldwide Corporation price-consensus-eps-surprise-chart | Otis Worldwide Corporation Quote
Adjusted operating margin expanded 20 basis points year over year to 17.1%. The result indicates reduced contributions from the New Equipment segment, mostly offset by growth in the Service segment. Our model predicted the adjusted operating margin to remain flat year over year.
Segment Details of OTIS
Service: The net sales of this segment increased 9% year over year to $2.43 billion. A 6% rise in organic sales was accompanied by a 6% favorable foreign exchange movement. Organic maintenance and repair sales increased 4% and organic modernization sales rose 14% from the year-ago quarter. Our model estimated organic sales for the segment to grow 5.9%. Modernization backlog at constant currency increased 22% year over year.
Segment operating margin expanded 70 bps year over year to 25.5%, due to higher volume, favorable pricing and productivity, partially offset by inflationary pressures including higher labor costs and mix.
New Equipment: This segment’s net sales of $1.26 billion fell 4% from the prior-year period. Organic sales declined 5%. Our model predicted organic sales for the New Equipment segment to decline 6.4%.
New Equipment orders were up 4% at constant currency, driven by high-teens growth in EMEA and mid-single-digit growth in the Americas. These gains were partially offset by a mid-single-digit decline in China and a slight decline in Asia Pacific. The segment’s backlog decreased 2% at actual currency and 1% at constant currency. Excluding China, backlog increased 7% at actual currency and 8% at constant currency.
Segment operating margin contracted 170 bps year over year to 4.7%. The downtrend was due to impacts of lower volume, unfavorable price, tariff headwinds and mix, which was partially offset by productivity tailwinds and other restructuring actions.
Financial Position of OTIS
Otis Worldwide had cash and cash equivalents of $840 million as of Sept. 30, 2025, down from $2.3 billion reported at 2024-end. Long-term debt increased to $7.59 billion as of the third-quarter end from $6.97 billion at 2024-end.
Net cash flows provided by operating activities were $779 million as of the first nine months of 2025, down from $873 million a year ago.
Adjusted free cash flow (“FCF”) totaled $766 million at the end of the first nine months, down from $889 million a year ago.
OTIS Revises 2025 Guidance
The company still expects net sales to be between $14.5 billion and $14.6 billion. The projection indicates approximately 2% year-over-year growth. Organic sales growth is projected to be approximately 1%.
Organic New Equipment sales are expected to be down about 7%. Organic Service sales are expected to be up nearly 5%.
Adjusted operating profit is still expected to be between $2.4 billion and $2.5 billion, now reflecting an increase of $65-$85 million at constant currency, excluding a tariff impact of approximately ($30) million and an increase of $75-$95 million at actual currency, including tariff impacts.
Adjusted EPS is now anticipated to be between $4.04 and $4.08 compared with the previously expected range of $4.00-$4.10.The projection indicates 5-7% year-over-year growth.
Adjusted FCF is now expected to be approximately $1.45 billion compared with the previously expected range of $1.4 billion and $1.5 billion. OTIS expects the adjusted effective tax rate to be approximately 24.8%.
OTIS' Zacks Rank & Recent Releases
Otis Worldwide currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
PulteGroup Inc. (PHM - Free Report) has reported better-than-expected third-quarter 2025 results, wherein adjusted earnings and total revenues handily beat the Zacks Consensus Estimate. However, the metrics declined year over year.
The performance of PulteGroup was hurt during the quarter due to the current softness in the housing market because of weaker consumer confidence and ongoing affordability challenges. Moreover, increases in direct costs related to home and land sales hurt the bottom line, alongside a decline in revenues. Nonetheless, with a diversified business platform, PulteGroup aims to counter the macro challenges and position itself for better growth prospects in the upcoming period.
KB Home (KBH - Free Report) reported third-quarter fiscal 2025 results. The quarter’s earnings and total revenues surpassed the Zacks Consensus Estimate but decreased on a year-over-year basis.
KB Home’s quarterly results highlighted ongoing challenges in a difficult housing market, reflecting pricing pressures across key regions. In response to weaker demand and the shortfall in orders, management adopted a cautious stance and revised its fiscal 2025 housing revenue guidance downward. KB Home is focused on expanding its build-to-order mix, reducing build times and enhancing customer satisfaction through affordable prices and personalization while maintaining strict cost controls.
Lennar Corporation (LEN - Free Report) reported dismal results for the third quarter of fiscal 2025, wherein its adjusted earnings and total revenues missed the Zacks Consensus Estimate. Also, both metrics tumbled on a year-over-year basis.
The quarter’s performance was adversely impacted by the softness in the housing market due to ongoing affordability challenges and a decline in consumer confidence. To counter the affordability issues, Lennar’s initiative of lowering the ASP adversely impacted revenue growth during the quarter. Nonetheless, Lennar is focusing on scale and technology investments to drive cost efficiencies. A strong balance sheet and disciplined execution are expected to support margin improvement as conditions stabilize.