OTIS REPORTS SECOND QUARTER 2024 RESULTS

Core Insights - Otis Worldwide Corporation reported solid quarterly performance, with GAAP EPS increasing by 13.3% to $1.02 and adjusted EPS rising by 15.2% to $1.06, driven by strong operational performance and margin expansion [6][27][32] - The Service segment showed robust growth, with net sales increasing by 3.0% and organic sales up by 5.1%, contributing to overall mid-teens EPS growth [5][6][30] - The company raised its full-year adjusted EPS outlook to a range of $3.85 to $3.90, reflecting confidence in its Service-driven strategy and modernization efforts [6][32] Financial Performance - Second quarter net sales were reported at $3.6 billion, a decrease of 3.2% year-over-year, primarily due to declines in the New Equipment segment [2][6] - The Service segment's operating profit margin expanded by 110 basis points to 24.7%, with operating profit increasing by $39 million at actual currency [9][30] - GAAP cash flow from operations was $308 million, while adjusted free cash flow was $353 million, indicating a strong liquidity position [10][31] Segment Analysis - The New Equipment segment experienced a decline in net sales to $1.4 billion, down 11.4% year-over-year, with organic sales growth in Asia Pacific offset by declines in other regions [8][30] - The Service segment's net sales reached $2.2 billion, up 3.0%, with organic maintenance and repair sales increasing by 4.9% and modernization sales by 5.8% [5][30] - Orders in the modernization category increased by 14%, with a backlog growth of 15%, indicating strong future demand [6][29] Outlook and Strategy - The company is executing its UpLift program, increasing expected run rate savings to $175 million by mid-2025, which is expected to enhance operational efficiency [6][32] - Otis is focused on a customer-centric strategy, with continued emphasis on modernization and service growth to drive future performance [6][32] - The updated full-year outlook reflects anticipated organic sales growth of 1% to 3%, with adjusted operating profit expected to rise significantly [32][33]