Otis's first quarter was met with a negative market reaction, as sales declined from the prior year and operating margins contracted. Management pointed to continued resilience in its service segment, which offset ongoing weakness in new equipment sales, particularly from China and the Americas. CEO Judy Marks described the quarter as “solid” due to stable organic sales and highlighted that service organic sales grew 4%, with modernization orders increasing 12%. Management was cautious about macroeconomic pressures, noting that new equipment declines and tariff-related costs weighed on overall profitability.

Is now the time to buy OTIS? Find out in our full research report (it’s free).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions Otis’s Q1 Earnings Call

• Jeffrey Sprague (Vertical Research): Asked about the gross versus net impact of tariffs and mitigation plans. CFO Cristina Mendez explained that the $90 million annualized impact from Chinese tariffs will be partially offset by supply chain and commercial actions.
• Amit Mehrotra (UBS): Queried the stickiness of price increases related to tariffs and potential local retaliation in China. CEO Judy Marks said price adjustments are being implemented for both new equipment and service; no targeted retaliation against Otis has been observed.
• Nigel Coe (Wolfe Research): Sought clarity on the calculation and timing of tariff impacts. Mendez clarified the annualized and in-year figures, noting mitigation efforts are ramping up and that backlog execution timing matters.
• Joe O'Dea (Wells Fargo): Asked about the causes of project delays in the Americas and differences in new equipment versus modernization demand. Marks described the situation as “fluid,” attributing delays to broader uncertainty in construction and materials markets, with modernization remaining more stable.
• Julian Mitchell (Barclays): Requested details on the cadence of margin expansion and how tariffs are factored into guidance. Management stated margins will be relatively flat in the first half, with improvement expected in the second half as cost actions take hold.

Catalysts in Upcoming Quarters

In the coming quarters, the StockStory team will watch (1) progress on tariff mitigation strategies and their impact on new equipment profitability, (2) the pace of repair and modernization backlog conversion—especially in China and the Americas, and (3) whether operational transformation initiatives such as Uplift deliver the anticipated cost savings. Monitoring changes in the macroeconomic environment and regulatory developments will also be important for tracking Otis’s performance.

Otis currently trades at $95.35, down from $98.82 just before the earnings. At this price, is it a buy or sell? Find out in our full research report (it’s free).

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