Otis Worldwide Corp (NYSE:OTIS) shares are trading lower after the company reported a second-quarter FY24 sales decline of 3.2% Y/Y to $3.60 billion, missing the consensus of $3.73 billion.

Adjusted operating profit increased to $613 million from $590 million, and the margin expanded by 110 bps to 17.0%, driven by favorable segment performance and mix.

New Equipment sales of $1.42 billion fell 11.4% Y/Y, with the segment operating margin expanding 30 bps to 7.7%.

New Equipment orders declined 11% Y/Y at constant currency as growth in EMEA and Asia Pacific more than offset by declines in China and the Americas. The new equipment backlog fell by 4% Y/Y in the quarter.

Service sales increased 3.0% Y/Y to $2.18 billion, and the segment operating margin expanded 110 bps Y/Y to 24.7%.

The Farmington, Connecticut-based company's maintenance portfolio units increased by 4.2% Y/Y; Mod orders were up 14% Y/Y, and backlog was up 17% Y/Y at constant currency.

Adjusted EPS increased 15.2% Y/Y to $1.06, beating the consensus of $1.03.

Otis's cash flow from operations of $308 million for the quarter decreased by $138 million Y/Y, and the adjusted free cash flow was $353 million. The company repurchased shares of $300 million during the quarter.

Judy Marks, Chair, CEO & President, said, "To drive growth, we continue to execute on our modernization strategy, with orders growth above 10% for the eighth consecutive quarter and backlog up mid-teens. Based on this performance, and with confidence in our Service-driven, customer-centric strategy, we are raising our EPS outlook."

Recently, Otis appointed Cristina Méndez as Executive Vice President & Chief Financial Officer, effective August 23, succeeding Anurag Maheshwari, who is leaving for a new opportunity.

FY24 Outlook: Otis revised its outlook for adjusted EPS to $3.85-$3.90 (from $3.83-$3.90 prior) vs. the consensus of 3.87.

The company lowered its net sales outlook to $14.30 billion-$14.50 billion (from $14.50 billion-$14.80 billion), vs. the consensus of $14.62 billion, and its organic sales growth outlook to 1%-3% (vs. up 3%-5% prior).

The company sees adjusted operating profit of $2.40 billion-$2.45 billion and adjusted free cash flow of $1.5 billion-$1.6 billion.

Investors can gain exposure to the stock via WBI BullBear Value 3000 ETF (NYSE:WBIF) and WBI BullBear Yield 3000 ETF (NYSE:WBIG).

Price Action: OTIS shares are down 4.34% at $94.11 premarket at the last check Wednesday.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.