Otis Worldwide to Report Q3 Earnings: Here's What You Need to Know

Otis Worldwide Corporation OTIS is scheduled to report third-quarter 2025 results on Oct. 29, before the opening bell.

In the last reported quarter, the company’s adjusted earnings topped the Zacks Consensus Estimate by 2.9%, while the net sales missed the same by 2.4%. On a year-over-year basis, both the top and bottom lines tumbled by 0.2% and 1%.

OTIS’ earnings surpassed the consensus mark in two of the trailing four quarters and missed on the remaining two occasions, with an average surprise of 0.2%.

Otis Worldwide Corporation Price and EPS Surprise

Otis Worldwide Corporation price-eps-surprise | Otis Worldwide Corporation Quote

Trend in Otis Worldwide’s Estimate Revision

For the quarter to be reported, the Zacks Consensus Estimate for adjusted earnings per share (EPS) has trended upward to $1.00 from 99 cents in the past 30 days. The estimated figure indicates an increase of 4.2% from the year-ago adjusted EPS of 96 cents.

The consensus mark for net sales is pegged at $3.65 billion, indicating 2.8% growth from the year-ago figure of $3.55 billion.

Key Factors to Note for OTIS’ Q3 Earnings

Net Sales

The company’s third-quarter net sales are likely to have increased year over year, supported by robust operational growth in the Service segment (which contributed 64.5% of the second quarter 2025 net sales). The segment’s growth is likely to have been driven by favorable market trends in maintenance and repair demand, as well as continued momentum in modernization projects. Additionally, ongoing progress with the UpLift initiative is likely to have contributed incremental value to the company’s orders and backlog during the quarter to be reported, further strengthening the top line.

Otis Worldwide’s emphasis on strategic acquisitions, product innovation and the integration of advanced technologies, supported by continuous research and development initiatives, is likely to have contributed positively to its overall performance.

However, softness in the New Equipment segment (which contributed 35.5% of the second quarter 2025 net sales) may have partially constrained top-line growth during the third quarter. The weak contribution from the segment is expected to have resulted from continued challenges in China and, to a lesser extent, in the EMEA region, particularly Europe.

For the third quarter, our model predicts the Service segment’s net sales to increase year over year by 7.9% to $2.42 billion, with the New Equipment segment’s net sales declining 5.1% to $1.24 billion.

Margins

The current reciprocal tariff rates are especially hitting its New Equipment segment’s margins due to the market share in China. Moreover, an unfavorable price and mix in this segment is likely to have somewhat weighed on OTIS’ margins. However, the quarter’s overall margin performance is expected to have been pulled up by tailwinds from the Service segment in the form of higher volume, favorable pricing and productivity.

Besides, the company’s restructuring actions, targeted at reducing costs and increasing savings, are likely to have boded well in the third quarter, resulting in margin expansion.

We expect the adjusted operating margin in the New Equipment segment to decrease 320 basis points (bps) year over year to 3.2%, while the same for the Service segment is anticipated to move up 60 bps to 25.4%.

Our model predicts adjusted EBITDA during the quarter to be up year over year by 2.9% to $665.9 million, with the adjusted EBITDA margin remaining relatively flat.

What Our Model Unveils for OTIS

Our proven model conclusively predicts an earnings beat for Otis Worldwide this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is exactly the case here.

OTIS’ Earnings ESP: OTIS has an Earnings ESP of +0.02%. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank of Otis Worldwide: Currently, the company carries a Zacks Rank of 3.

Other Stocks With the Favorable Combination

Here are some other stocks from the Zacks Industrial Products sector, which, per our model, also have the right combination of elements to deliver an earnings beat this time around.

AptarGroup, Inc. ATR currently has an Earnings ESP of +1.27% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 8.3%. AptarGroup’s earnings for the third quarter of 2025 are expected to increase 5.4%.

Caterpillar Inc. CAT currently has an Earnings ESP of +1.44% and a Zacks Rank of 3.

The company’s earnings beat estimates in one of the last four quarters and missed on the remaining three occasions, the negative average surprise being 1%. Caterpillar’s earnings for the third quarter of 2025 are expected to decline 12.6%.

ESAB Corporation ESAB currently has an Earnings ESP of +0.47% and a Zacks Rank of 3.

The company’s earnings beat estimates in each of the trailing four quarters, the average surprise being 7.6%. ESAB’s earnings for the third quarter of 2025 are expected to increase 1.6%.

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This article originally published on Zacks Investment Research (zacks.com).

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