Otis Worldwide Corporation (NYSE:OTIS) shares are trading lower premarket on Wednesday after the company after the company reported first-quarter results.

The company reported:

• A sales decline of 3% year over year (Y/Y) to $3.35 billion, missing the analyst’s estimate of $3.37 billion due to New Equipment in China.
• Organic sales remained flat Y/Y.
• Net sales in the New Equipment segment fell 9% year over year to $1.16 billion, mainly due to an over 20% decline in China and a high-single-digit decrease in the Americas.
• Meanwhile, Service segment net sales rose 1% Y/Y to $2.19 billion. Organic maintenance and repair sales increased 3% Y/Y and organic modernization sales upped 10% Y/Y.
• Adjusted operating profit decreased 1% Y/Y to $560 million, with adjusted operating profit margin expanding 40 basis points to 16.7%, led by favorable Service segment performance and mix.
• Adjusted EPS of 92 cents, up 5% Y/Y, beat the analysts' estimates of 91 cents.
• In the quarter, operating cash flow stood at $190 million, and adjusted free cash flow came in at $186 million.
• Repurchased shares of $250 million in the quarter.

2025 Outlook: The company raised net sales guidance to $14.6 billion-$14.8 billion (from $14.1 billion to $14.4 billion) vs. consensus of $14.53 billion, with organic sales growth of 2% to 4%.

The company reaffirmed guidance for an adjusted operating profit of $2.4 billion-$2.5 billion, adjusted EPS of $4.00-$4.10 (vs. consensus of $4.06), and adjusted free cash flow of around $1.6 billion.

Adjusted operating profit guidance excludes tariff impact: losses of $75 million to $45 million. Including the tariff impact, the projected increase at constant currency would be $105 to $135 million.

CEO Judy Marks said, “We continued to execute our modernization strategy with orders up 12% leading to a mid-teens backlog growth that sets us up well for the rest of the year. We also grew our industry leading maintenance portfolio 4% again this quarter,”

Dividend: On Tuesday, Otis declared a quarterly dividend increase of 8% to 42 cents per share, payable on June 6, 2025, to shareholders of record as of May 16, 2025.

Investors can gain exposure to the stock via AdvisorShares Focused Equity ETF (NYSE:CWS) and Brookstone Value Stock ETF (BATS:BAMV).

Price Action: OTIS shares are down 2.98% at $96.00 premarket at last check Wednesday.

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