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Otis Worldwide Q4 Earnings Meet Estimates, Sales Miss, Stock Down
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Key Takeaways
OTIS reported Q4 EPS in line with estimates, while net sales missed estimates despite year-over-year growth.
OTIS saw strong Service sales from maintenance and modernization, offset by weaker New Equipment demand.
Otis Worldwide issued a confident 2026 outlook, but shares fell 4.9% in pre-market trading after results.
Otis Worldwide Corporation (OTIS - Free Report) reported mixed fourth-quarter 2025 results, wherein earnings came in line with the Zacks Consensus Estimate, but net sales missed the same. Meanwhile, on a year-over-year basis, both the top and bottom lines increased.
Otis Worldwide’s fourth-quarter 2025 results were supported by year-over-year growth, driven primarily by Service sales, with gains across all lines of business. This performance was partially offset by lower new equipment sales in China and the Americas. Service segment growth was fueled by strong momentum in organic maintenance and repair, along with a significant increase in organic modernization sales.
Overall performance highlights the continued success of OTIS’ Service-led strategy. Despite New Equipment headwinds in key regions, a robust increase in modernization orders and an expanding total backlog reinforced operational momentum. Supported by this strength, the company has outlined a confident 2026 outlook, projecting adjusted EPS growth in the mid- to high-single-digit range.
Following the results, OTIS stock declined 4.9% during today’s pre-market trading session.
Inside OTIS’ Q4 Headlines
The company reported adjusted earnings of $1.03 per share, in line with the Zacks Consensus Estimate. The reported figure increased 10.8% from the year-ago quarter’s EPS of 93 cents.
Otis Worldwide Corporation Price, Consensus and EPS Surprise
Net sales of $3.8 billion missed the consensus mark of $3.9 billion by 2.7% but increased 3.3% on a year-over-year basis. Organically, net sales were up 1% year over year. Favorable foreign exchange movement supported sales growth by 2%.
Adjusted operating margin expanded 70 basis points year over year to 16.6%, reflecting a favorable segment mix and improved performance across key segments. Our model predicted the adjusted operating margin to decrease 60 bps (basis points) year over year to 16.5%.
Segment Details of OTIS
Service: The net sales of this segment increased 8% year over year to $2.5 billion. A 5% rise in organic sales was accompanied by a 3% favorable foreign exchange movement. Organic maintenance and repair sales increased 4% and organic modernization sales rose 9% from the year-ago quarter. Our model estimated organic sales for the segment to grow 9%. The Modernization backlog at constant currency increased 30% year over year.
Segment operating margin expanded 100 bps year over year to 25.5%, driven by higher volume, favorable pricing and productivity, and gains on sales of assets, partially offset by inflationary pressures including higher labor costs and mix.
New Equipment: This segment’s net sales of $1.29 billion fell 5% from the prior-year period. Organic sales declined 6%. Our model predicted organic sales for the New Equipment segment to increase 4%.
New Equipment orders were down 2% at a constant currency basis for the quarter, as mid-single-digit growth in EMEA and the Americas was more than offset by a high-teens decline in Asia Pacific due to a tough comparison along with a mid-single-digit decline in China. The segment’s backlog increased 6% at actual currency and 2% at constant currency.
Segment operating margin contracted 110 bps year over year to 3.6%. 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 $1.1 billion as of Dec. 31, 2025, down from $2.3 billion reported at 2024-end. Long-term debt decreased to $6.9 billion as of the end of 2025 from $6.97 billion at 2024-end.
Net cash flows provided by operating activities were $1.59 billion as of 2025, up from $1.56 billion a year ago.
Adjusted free cash flow (FCF) totaled $1.58 billion at the end of 2025, up from $1.57 billion a year ago.
OTIS’ 2025 Highlights
Net sales for 2025 came in at $14.4 billion compared with $14.3 billion reported in 2024.
Adjusted operating profit in 2025 came in at $2.4 billion compared with $2.3 billion reported in 2024.
In 2025, adjusted EPS came in at $4.05 compared with $3.83 reported in the previous year.
OTIS Unveils 2026 Guidance
The company is expecting net sales to be between $15 billion and $15.3 billion. The projection indicates approximately 4.2%-6.3% year-over-year growth. Organic sales growth is projected in the low- to mid-single-digit range.
Organic New Equipment sales are expected to be flat to down low single digits, while Organic Service sales are anticipated to grow in the mid- to high-single-digit range.
Adjusted operating profit is anticipated to be between $2.5 billion and $2.6 billion, now reflecting an increase of $60-$100 million at constant currency, and an increase of $100-$140 million at actual currency.
Adjusted EPS is now expected to increase in the mid- to high-single-digit range. Adjusted FCF is now expected to be between $1.6 billion and $1.7 billion.
OTIS' Zacks Rank & Better-Ranked Stocks
Otis Worldwide currently carries a Zacks Rank #3 (Hold).
The company delivered a trailing four-quarter earnings surprise of 43.5%, on average. DNOW stock has moved down 7.3% in the past six months. The Zacks Consensus Estimate for DNOW’s 2026 sales and EPS indicates an increase of 96.3% and 20.5%, respectively, from the year-ago levels.
Core & Main, Inc. (CNM - Free Report) currently flaunts a Zacks Rank of 1. The company delivered a trailing four-quarter negative earnings surprise of 2.8%, on average. CNM stock has declined 15.3% in the past six months.
The Zacks Consensus Estimate for Core & Main’s fiscal 2026 sales and EPS implies growth of 3% and 37.6%, respectively, from the year-ago levels.
TriMas Corporation (TRS - Free Report) currently has a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 6.4%, on average. TRS stock has declined 1.2% in the past six months.
The Zacks Consensus Estimate for TriMas’ 2026 sales and EPS implies growth of 7.5% and 20.2%, respectively, from the year-ago levels.
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Otis Worldwide Q4 Earnings Meet Estimates, Sales Miss, Stock Down
Key Takeaways
Otis Worldwide Corporation (OTIS - Free Report) reported mixed fourth-quarter 2025 results, wherein earnings came in line with the Zacks Consensus Estimate, but net sales missed the same. Meanwhile, on a year-over-year basis, both the top and bottom lines increased.
Otis Worldwide’s fourth-quarter 2025 results were supported by year-over-year growth, driven primarily by Service sales, with gains across all lines of business. This performance was partially offset by lower new equipment sales in China and the Americas. Service segment growth was fueled by strong momentum in organic maintenance and repair, along with a significant increase in organic modernization sales.
Overall performance highlights the continued success of OTIS’ Service-led strategy. Despite New Equipment headwinds in key regions, a robust increase in modernization orders and an expanding total backlog reinforced operational momentum. Supported by this strength, the company has outlined a confident 2026 outlook, projecting adjusted EPS growth in the mid- to high-single-digit range.
Following the results, OTIS stock declined 4.9% during today’s pre-market trading session.
Inside OTIS’ Q4 Headlines
The company reported adjusted earnings of $1.03 per share, in line with the Zacks Consensus Estimate. The reported figure increased 10.8% from the year-ago quarter’s EPS of 93 cents.
Otis Worldwide Corporation Price, Consensus and EPS Surprise
Otis Worldwide Corporation price-consensus-eps-surprise-chart | Otis Worldwide Corporation Quote
Net sales of $3.8 billion missed the consensus mark of $3.9 billion by 2.7% but increased 3.3% on a year-over-year basis. Organically, net sales were up 1% year over year. Favorable foreign exchange movement supported sales growth by 2%.
Adjusted operating margin expanded 70 basis points year over year to 16.6%, reflecting a favorable segment mix and improved performance across key segments. Our model predicted the adjusted operating margin to decrease 60 bps (basis points) year over year to 16.5%.
Segment Details of OTIS
Service: The net sales of this segment increased 8% year over year to $2.5 billion. A 5% rise in organic sales was accompanied by a 3% favorable foreign exchange movement. Organic maintenance and repair sales increased 4% and organic modernization sales rose 9% from the year-ago quarter. Our model estimated organic sales for the segment to grow 9%. The Modernization backlog at constant currency increased 30% year over year.
Segment operating margin expanded 100 bps year over year to 25.5%, driven by higher volume, favorable pricing and productivity, and gains on sales of assets, partially offset by inflationary pressures including higher labor costs and mix.
New Equipment: This segment’s net sales of $1.29 billion fell 5% from the prior-year period. Organic sales declined 6%. Our model predicted organic sales for the New Equipment segment to increase 4%.
New Equipment orders were down 2% at a constant currency basis for the quarter, as mid-single-digit growth in EMEA and the Americas was more than offset by a high-teens decline in Asia Pacific due to a tough comparison along with a mid-single-digit decline in China. The segment’s backlog increased 6% at actual currency and 2% at constant currency.
Segment operating margin contracted 110 bps year over year to 3.6%. 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 $1.1 billion as of Dec. 31, 2025, down from $2.3 billion reported at 2024-end. Long-term debt decreased to $6.9 billion as of the end of 2025 from $6.97 billion at 2024-end.
Net cash flows provided by operating activities were $1.59 billion as of 2025, up from $1.56 billion a year ago.
Adjusted free cash flow (FCF) totaled $1.58 billion at the end of 2025, up from $1.57 billion a year ago.
OTIS’ 2025 Highlights
Net sales for 2025 came in at $14.4 billion compared with $14.3 billion reported in 2024.
Adjusted operating profit in 2025 came in at $2.4 billion compared with $2.3 billion reported in 2024.
In 2025, adjusted EPS came in at $4.05 compared with $3.83 reported in the previous year.
OTIS Unveils 2026 Guidance
The company is expecting net sales to be between $15 billion and $15.3 billion. The projection indicates approximately 4.2%-6.3% year-over-year growth. Organic sales growth is projected in the low- to mid-single-digit range.
Organic New Equipment sales are expected to be flat to down low single digits, while Organic Service sales are anticipated to grow in the mid- to high-single-digit range.
Adjusted operating profit is anticipated to be between $2.5 billion and $2.6 billion, now reflecting an increase of $60-$100 million at constant currency, and an increase of $100-$140 million at actual currency.
Adjusted EPS is now expected to increase in the mid- to high-single-digit range. Adjusted FCF is now expected to be between $1.6 billion and $1.7 billion.
OTIS' Zacks Rank & Better-Ranked Stocks
Otis Worldwide currently carries a Zacks Rank #3 (Hold).
Here are some better-ranked stocks from the Industrial Products sector:
DNOW Inc. (DNOW - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The company delivered a trailing four-quarter earnings surprise of 43.5%, on average. DNOW stock has moved down 7.3% in the past six months. The Zacks Consensus Estimate for DNOW’s 2026 sales and EPS indicates an increase of 96.3% and 20.5%, respectively, from the year-ago levels.
Core & Main, Inc. (CNM - Free Report) currently flaunts a Zacks Rank of 1. The company delivered a trailing four-quarter negative earnings surprise of 2.8%, on average. CNM stock has declined 15.3% in the past six months.
The Zacks Consensus Estimate for Core & Main’s fiscal 2026 sales and EPS implies growth of 3% and 37.6%, respectively, from the year-ago levels.
TriMas Corporation (TRS - Free Report) currently has a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter earnings surprise of 6.4%, on average. TRS stock has declined 1.2% in the past six months.
The Zacks Consensus Estimate for TriMas’ 2026 sales and EPS implies growth of 7.5% and 20.2%, respectively, from the year-ago levels.