Q1 2026 Otis Worldwide Corp Earnings Call Transcript
Key Points
- Otis Worldwide Corp (OTIS) reported a 1% increase in total organic sales for the first quarter of 2026, driven by a 5% growth in the service segment.
- The company saw a significant 11% increase in modernization orders, with a 30% increase in backlog at constant currency, indicating strong future demand.
- Adjusted free cash flow improved by 46% year-over-year to approximately $272 million, reflecting better working capital management and cash conversion.
- Otis Worldwide Corp (OTIS) announced a 5% increase in its quarterly dividend, marking a 120% increase since its spin-off, demonstrating a commitment to returning cash to shareholders.
- The company completed $400 million in share repurchases during the quarter, showcasing its strategic capital deployment to enhance shareholder value.
- New equipment organic sales declined by 5% in the quarter, with significant declines in Asia, particularly China.
- Service operating profit decreased by $10 million at constant currency, with a 160 basis point contraction in operating margin due to higher labor and material costs.
- The company faced a 130 basis point decline in adjusted operating profit margin, attributed to operational challenges and unfavorable mix.
- Otis Worldwide Corp (OTIS) experienced project delays in the EMEA region due to the conflict in the Middle East, impacting modernization sales.
- The company anticipates potential negative impacts from the ongoing Middle East conflict, which could affect new equipment demand and project execution.
Good morning, and welcome to Otis' first quarter 2026 earnings conference call. This call is being carried live over the Internet and recorded for replay. Presentation materials are available for download from Otis' website at www.otis.com.
I'll now turn it over to Rob Quartaro, Vice President of Investor Relations. Please go ahead.
Thank you, Krista. Welcome to Otis' first quarter 2026 earnings conference call. On the call with me today are Judy Marks, Chair, CEO and President; and Christina Mendez, Executive Vice President and CFO.
Please note, except where otherwise noted, the company will speak to results from continuing operations excluding restructuring and significant non-recurring items. A reconciliation of these measures can be found in the appendix of the webcast.
We also remind listeners that the presentation contains forward-looking statements, which are subject to risks and
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