Otis Worldwide (US:OTIS) ZACKS·2025-10-28 19:25Core Insights - Otis Worldwide Corporation (OTIS) is set to report its third-quarter 2025 results on October 29, with adjusted earnings expected to show a 4.2% increase year-over-year, while net sales are projected to grow by 2.8% [1][3]. Financial Performance - In the last reported quarter, adjusted earnings exceeded the Zacks Consensus Estimate by 2.9%, while net sales fell short by 2.4%. Year-over-year, both top and bottom lines decreased by 0.2% and 1%, respectively [1][2]. - The Zacks Consensus Estimate for adjusted EPS has risen to $1.00 from 99 cents over the past month, indicating a year-over-year increase from 96 cents [3]. Sales and Segment Analysis - The Service segment, contributing 64.5% of net sales in Q2 2025, is expected to drive year-over-year growth in net sales, supported by strong demand in maintenance, repair, and modernization projects [4][9]. - Conversely, the New Equipment segment, which accounted for 35.5% of Q2 2025 net sales, is anticipated to see a decline of 5.1% in net sales due to challenges in China and Europe [6][7]. Margin Insights - The New Equipment segment's margins are under pressure from reciprocal tariff rates and unfavorable pricing, while the Service segment is expected to benefit from higher volume and favorable pricing, leading to overall margin stability [8][10]. - Adjusted operating margin for the New Equipment segment is predicted to decrease by 320 basis points to 3.2%, while the Service segment's margin is expected to increase by 60 basis points to 25.4% [10]. Earnings Prediction - The model predicts an adjusted EBITDA increase of 2.9% year-over-year to $665.9 million, with the adjusted EBITDA margin remaining relatively flat [11]. - The combination of a positive Earnings ESP of +0.02% and a Zacks Rank of 3 suggests a favorable outlook for an earnings beat in the upcoming report [12][13].