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Get filing alertsOtis cuts 2026 EPS guidance to $4.01–$4.05 on New Equipment margin pressure
Filed July 22, 2026 · Period ending July 22, 2026 · ~1 min read
Key Changes
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Revised full-year adjusted EPS to $4.01–$4.05, down from prior guidance, with adjusted operating profit expected at ~$2.4B (down $45–$15M at constant currency) due to New Equipment headwinds.
Exhibit 99 view on EDGAR → -
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New Equipment segment operating profit fell $28M to $40M in Q2, with margin contracting 220 bps to 3.1% on lower volume, unfavorable pricing, and mix; China sales down high-teens.
Exhibit 99 view on EDGAR → -
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Service segment delivered 9% organic sales growth (24% in modernization, 6% in maintenance/repair), but margin contracted 170 bps to 23.2% on higher labor costs and material headwinds.
Exhibit 99 view on EDGAR → -
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Q2 adjusted EPS fell 4% to $1.01 despite 6% organic sales growth, pressured by operational headwinds, higher interest expense, and higher tax rate; GAAP EPS rose 13% to $1.12.
Exhibit 99 view on EDGAR → -
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Repurchased ~$400M of shares in Q2 ($800M year-to-date); generated $290M adjusted free cash flow in Q2, with full-year guidance of $1.50–$1.55B.
Exhibit 99 view on EDGAR →
Summary
Otis lowered its full-year 2026 adjusted EPS guidance to $4.01–$4.05, citing persistent margin pressure in its New Equipment segment. Second-quarter results showed the New Equipment business under significant strain: operating profit fell $28 million to just $40 million, with margin contracting 220 basis points to 3.1%.
The segment faced lower volume, unfavorable pricing, and mix headwinds, including high-teens sales declines in China and mid-single-digit declines in EMEA. New Equipment orders fell 5% at constant currency, signaling continued near-term challenges. The Service segment provided a partial offset with 9% organic sales growth, driven by 24% growth in modernization and 6% in maintenance and repair.
However, Service margins also contracted 170 basis points to 23.2% due to higher labor costs from strategic initiatives and material cost headwinds. Overall, Q2 adjusted EPS fell 4% to $1.01 despite 6% organic sales growth, as operational pressures and higher interest expense outweighed share repurchase benefits. The company repurchased $400 million of shares in the quarter and expects full-year adjusted free cash flow of $1.50–$1.55 billion, maintaining capital return despite the earnings reset. Investors should watch whether New Equipment stabilizes in the second half and whether Service margin pressures persist into 2027.
Section-by-Section Diff
Event · Exhibit 99
Otis reports Q2 2026 results with 9% organic Service sales growth, revised full-year outlook lowering adjusted EPS to $4.01–$4.05, and $400M in Q2 share repurchases.
Added in current filing · view on EDGAR → · paraphrased
Net sales of $3.9 billion with organic sales up 6% versus the prior year. GAAP earnings per share (EPS) increased 13% to $1.12 and adjusted EPS decreased 4% to $1.01.
Otis reported second quarter 2026 net sales of $3.9 billion, up 7% year-over-year, driven by 11% growth in Service net sales (9% organic) while New Equipment sales were flat. GAAP EPS rose 13% to $1.12, but adjusted EPS fell 4% to $1.01 due to operational headwinds, higher interest expense, and a higher tax rate, partially offset by share repurchases and favorable foreign exchange.
Added in current filing · view on EDGAR →
In the second quarter, net sales of $2.6 billion increased 11%, with a 9% increase in organic sales. Organic maintenance and repair sales increased 6% and organic modernization sales increased 24%.
Service segment delivered strong performance with net sales of $2.6 billion, up 11% (9% organic), driven by 24% organic growth in modernization and 6% growth in maintenance and repair. Segment operating profit increased $21 million to $599 million, though margin contracted 170 basis points to 23.2% due to higher labor costs from strategic initiatives, material cost headwinds, and unfavorable mix.
Added in current filing · view on EDGAR →
In the second quarter, net sales of $1.3 billion were flat versus the prior year, with approximately 10% organic sales 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. ... Segment operating profit of $40 million decreased $28 million at actual currency and $30 million at constant currency primarily from the impacts of lower volume, unfavorable price, and mix. Segment operating profit margin contracted 220 basis points to 3.1%.
New Equipment segment faced significant headwinds with flat net sales and a sharp profit decline. Segment operating profit fell $28 million to $40 million, with margin contracting 220 basis points to 3.1%, driven by lower volume, unfavorable pricing, and mix. Geographic performance was mixed: Americas up ~10%, offset by high-teens declines in China and mid-single-digit declines in EMEA. New Equipment orders declined 5% at constant currency.
Added in current filing · view on EDGAR →
Otis is revising our full year outlook:
•Net sales of $15.1 to $15.3 billion
•Organic sales up low to mid-single digits
◦Organic New Equipment sales down low single digits to flat
◦Organic Service sales up mid to high single digits
•Adjusted operating profit of approximately $2.4 billion, down $45 to $15 million at constant currency; down $30 million to flat at actual currency
•Adjusted EPS of $4.01 to $4.05
•Adjusted free cash flow of $1.50 to 1.55 billion
Otis revised its full-year 2026 outlook, lowering adjusted EPS guidance to $4.01–$4.05 and adjusted operating profit to approximately $2.4 billion (down $45–$15 million at constant currency). The company expects net sales of $15.1–$15.3 billion with low-to-mid single-digit organic growth, driven by mid-to-high single-digit Service growth offsetting low-single-digit-to-flat New Equipment sales. Adjusted free cash flow is projected at $1.50–$1.55 billion.
Added in current filing · view on EDGAR →
Operating cash flow of $267 million; adjusted free cash flow of $290 million ... Share repurchases of approximately $400 million ... First half 2026 ... Operating cash flow of $680 million; adjusted free cash flow of $562 million ... Share repurchases of approximately $800 million
Otis generated $267 million in operating cash flow and $290 million in adjusted free cash flow in Q2 2026, with $680 million and $562 million respectively for the first half. The company repurchased approximately $400 million of shares in Q2 and $800 million year-to-date, demonstrating continued commitment to returning capital to shareholders despite operational headwinds.
Event · Item 2.02 — Results of Operations and Financial Condition
Otis announced Q2 2026 earnings results via press release furnished as Exhibit 99.
Added in current filing · verify on EDGAR →
On July 22, 2026, Otis Worldwide Corporation (“Otis”) issued a press release announcing its second quarter 2026 results.
Otis disclosed its second quarter 2026 financial results through a press release. The 8-K body provides no quantitative details; all financial metrics (revenue, earnings, margins, guidance) would be contained in the furnished Exhibit 99 press release, which is not included in the provided text.
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Figures/quotes linked to EDGAR · Narrative written by AI · Jul 23, 2026 · How we verify