How did Otis's Service business perform in the second quarter of 2026?

Service net sales increased 11% to $2,580 million, with organic sales up 9%. Organic maintenance and repair sales rose 6% and organic modernization sales rose 24%. Segment operating profit increased $21 million to $599 million, but segment operating profit margin contracted 170 basis points to 23.2% due to higher labor costs, material cost headwinds, and unfavorable mix.

Why did New Equipment results weaken in the quarter?

New Equipment net sales were flat at $1,279 million, with organic sales down (1)%. Segment operating profit fell $28 million to $40 million, and margin contracted 220 basis points to 3.1%, primarily due to lower volume, unfavorable price, and mix. Orders declined 5% at constant currency, with a high teens decline in China and a greater than 20% decline in Asia Pacific, partly offset by growth in the Americas.

Why did adjusted earnings decline while GAAP earnings increased?

GAAP operating profit and EPS increased mainly because the prior year included UpLift transformation costs, separation-related adjustments, and other non-recurring items that did not recur. Adjusted operating profit and adjusted EPS declined due to operational performance, higher interest expense, and a higher tax rate, partially offset by favorable foreign exchange, a lower share count, and lower noncontrolling interest.

How much capital did Otis return to shareholders and how strong was its cash generation?

Otis repurchased approximately $400 million of shares in the second quarter and approximately $800 million in the first half of 2026. Operating cash flow was $267 million in the quarter and $680 million for the first half, while adjusted free cash flow was $290 million in the quarter and $562 million for the first half. Dividends paid on common stock were $167 million in the quarter.

OTIS 8-K: Earnings & Results

Q: What is Otis's updated full-year 2026 outlook?

Otis expects net sales of $15.1 to $15.3 billion, organic sales up low to mid-single digits, adjusted operating profit of approximately $2.4 billion, adjusted EPS of $4.01 to $4.05, and adjusted free cash flow of $1.50 to $1.55 billion. Organic Service sales are expected to rise mid to high single digits, while organic New Equipment sales are expected to decline low single digits to flat.

01—Abstract

Summary

Summary of the 8-K filed July 22, 2026. Cited figures are marked; the original filing is the authoritative source.

Otis Worldwide Corporation reported second quarter 2026 results in a press release furnished as Exhibit 99 to this Form 8-K dated July 22, 2026.

Net sales were $3.9 billion^a ($3,859 million), up 7% year over year, or 6% on an organic basis. Service net sales rose 11% to $2.6 billion, with organic Service sales up 9%, while New Equipment net sales were flat at $1.3 billion, with organic sales down (1)%. GAAP operating profit increased $28 million to $575 million, while adjusted operating profit declined $25 million to $587 million, and adjusted operating profit margin fell 180 basis points to 15.2%.

GAAP EPS rose 13% to $1.12^b, while adjusted EPS fell 4% to $1.01. Cash flow from operations was $267 million in the quarter and $680 million in the first half, and adjusted free cash flow was $290 million in the quarter and $562 million for the first half. Otis repurchased approximately $400 million of shares in the quarter and approximately $800 million in the first half.

Modernization orders rose 9%^c at constant currency and modernization backlog rose 24% (26% at constant currency). New Equipment backlog increased 3% at actual currency. Management cited double-digit growth in modernization and repair sales and accelerating maintenance trends.

Otis revised its full-year 2026 outlook to net sales of $15.1 to $15.3 billion^d, organic sales up low to mid-single digits, adjusted operating profit of approximately $2.4 billion, adjusted EPS of $4.01 to $4.05, and adjusted free cash flow of $1.50 to $1.55 billion. Organic Service sales are expected to rise mid to high single digits, while organic New Equipment sales are expected to decline low single digits to flat.

02—Key points

Key Highlights

Second quarter net sales of $3,859 million rose 7% year over year, with organic sales up 6%.
Service net sales rose 11% to $2,580 million, with organic Service sales up 9%; modernization sales grew 26% and maintenance and repair grew 8%.
New Equipment net sales were flat at $1,279 million, with organic sales down (1)%, and segment operating profit fell $28 million to $40 million.
GAAP EPS increased 13% to $1.12, while adjusted EPS decreased 4% to $1.01, driven by operational performance, higher interest, and a higher tax rate.
Adjusted operating profit declined $25 million to $587 million, and adjusted operating profit margin contracted 180 basis points to 15.2%.
Operating cash flow was $267 million and adjusted free cash flow was $290 million in the quarter; share repurchases were approximately $400 million.
Full-year 2026 outlook was revised: net sales of $15.1 to $15.3 billion, adjusted EPS of $4.01 to $4.05, and adjusted free cash flow of $1.50 to $1.55 billion.

03—Questions

Frequently Asked Questions

How did Otis's Service business perform in the second quarter of 2026?
Service net sales increased 11% to $2,580 million, with organic sales up 9%. Organic maintenance and repair sales rose 6% and organic modernization sales rose 24%. Segment operating profit increased $21 million to $599 million, but segment operating profit margin contracted 170 basis points to 23.2% due to higher labor costs, material cost headwinds, and unfavorable mix.
Why did New Equipment results weaken in the quarter?
New Equipment net sales were flat at $1,279 million, with organic sales down (1)%. Segment operating profit fell $28 million to $40 million, and margin contracted 220 basis points to 3.1%, primarily due to lower volume, unfavorable price, and mix. Orders declined 5% at constant currency, with a high teens decline in China and a greater than 20% decline in Asia Pacific, partly offset by growth in the Americas.
Why did adjusted earnings decline while GAAP earnings increased?
GAAP operating profit and EPS increased mainly because the prior year included UpLift transformation costs, separation-related adjustments, and other non-recurring items that did not recur. Adjusted operating profit and adjusted EPS declined due to operational performance, higher interest expense, and a higher tax rate, partially offset by favorable foreign exchange, a lower share count, and lower noncontrolling interest.
What is Otis's updated full-year 2026 outlook?
Otis expects net sales of $15.1 to $15.3 billion, organic sales up low to mid-single digits, adjusted operating profit of approximately $2.4 billion, adjusted EPS of $4.01 to $4.05, and adjusted free cash flow of $1.50 to $1.55 billion. Organic Service sales are expected to rise mid to high single digits, while organic New Equipment sales are expected to decline low single digits to flat.
How much capital did Otis return to shareholders and how strong was its cash generation?
Otis repurchased approximately $400 million of shares in the second quarter and approximately $800 million in the first half of 2026. Operating cash flow was $267 million in the quarter and $680 million for the first half, while adjusted free cash flow was $290 million in the quarter and $562 million for the first half. Dividends paid on common stock were $167 million in the quarter.

04—Continue

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