Otis Reports Solid Q4 & Full-Year 2025 Results, Projects Mid-to-High Single-Digit Adjusted EPS Growth for 2026
Summary
Otis Worldwide Corporation announced solid fourth-quarter and full-year 2025 results, driven by strong Service segment performance, and provided a positive outlook for 2026 with projected mid-to-high single-digit adjusted EPS growth.
Key Events
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Strong Service Segment Performance
Fourth quarter Service net sales increased 8% (5% organic), with operating profit margin expanding 100 basis points. Full-year Service organic sales grew 5%.
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Positive Adjusted EPS Growth
Fourth quarter adjusted EPS rose 11% to $1.03, and full-year adjusted EPS increased 6% to $4.05.
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2026 Outlook Provided
The company forecasts low to mid-single-digit organic sales growth, mid to high single-digit adjusted EPS growth, and $1.6 to $1.7 billion in adjusted free cash flow for 2026.
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Modernization Orders Surge
Modernization orders were up 43% at constant currency in Q4, contributing to a 30% increase in backlog at constant currency.
Analysis
Otis Worldwide delivered a robust performance in its Service segment, which continues to be the primary growth driver, offsetting persistent weakness in New Equipment sales, especially in the challenging China market. The company's strategic focus on its higher-margin Service business is evident in the strong operating profit margin expansion and significant growth in modernization orders and backlog. The positive 2026 outlook for adjusted EPS and free cash flow, alongside substantial share repurchases, indicates management's confidence in its strategy and ability to generate shareholder value despite headwinds in certain new equipment markets. Investors should monitor the continued execution of the Service strategy and any potential stabilization or further deterioration in the New Equipment segment.
At the time of this filing, OTIS was trading at $90.88 on NYSE in the Manufacturing sector, with a market capitalization of approximately $35.3B. The 52-week trading range was $84.25 to $106.83. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.