$OTIS · Otis Worldwide Corp
Otis Worldwide filed its Q3 2026 10-Q, reporting net sales of $3.914B (+6.1% YoY), net income attributable to Otis of $414M, and diluted EPS of $1.08 versus $0.95 in the prior-year quarter. Service revenue grew 7.5% to $2.616B while New Equipment rose 3% to $1.298B. Operating margins contracted in both segments: New Equipment fell to 3.2% from 4.7%, and Service declined to 24.2% from 25.5%. The company repurchased $807M in shares over nine months, reducing basic share count by ~10M shares.
- Q3 revenue $3.914B, +6.1% YoY, driven by Service sales up 7.5% to $2.616B
- Diluted EPS $1.08 vs $0.95 prior year (+13.7%); basic shares down 10M to 381.0M via buybacks
- New Equipment operating margin fell 150bps to 3.2% on $1.298B sales (+3% YoY)
- Service operating margin declined 130bps to 24.2% despite 7.5% revenue growth
- Nine-month operating cash flow surged to $1.017B from $779M; $807M spent on share repurchases
Extended-hours last trade $74.67, essentially flat (+0.08%) vs regular close of $74.61. The muted reaction suggests the strong top-line growth and EPS beat were largely priced in or offset by margin compression concerns.
Otis delivered strong top-line growth and double-digit EPS gains, but simultaneous margin erosion in both operating segments raises questions about cost discipline and pricing power heading into year-end.
Otis's 6.1% revenue growth and strong service backlog contrast with broader industrial peers facing demand softening. The margin compression in both segments, however, mirrors cost inflation pressures seen across the elevator and building-technology sector.
New Equipment operating margin dropped to 3.2% from 4.7% YoY — a 150bps decline on only 3% sales growth, signaling cost pressure in the product segment. Service margin also compressed 130bps to 24.2%, suggesting pricing power may be eroding in the higher-margin maintenance business.