By Nicholas G. Miller

Otis Worldwide reported higher first-quarter revenue, boosted by its services business, but said that its margins were hurt by higher labor and material costs.

The elevator and escalator company posted net income of $340 million, or 87 cents a share, compared with $243 million, or 61 cents a share, the year prior.

Adjusted earnings were 89 cents a share. Analysts polled by FactSet expected 90 cents a share.

Net sales rose 6% to $3.57 billion. Wall Street expected $3.5 billion. Services sales rose 11% to $2.42 billion, offsetting a 1% decline in new equipment sales.

Meanwhile, operating profit margin in both of its segments declined. The company's services business was hurt by higher labor and material cost, investments and mix, while operating profit for new equipment was dragged down by lower volume, unfavorable pricing and mix.

"While underlying demand remains solid as reflected in our order activity, we faced near‑term pressures, reflected in our Service margins, from cost headwinds and investments in growth," said Chief Executive Judy Marks. "We are taking decisive actions focused on operational execution, pricing, and cost efficiency to address these pressures."

The company guided for fiscal 2026 net sales of $15.1 billion to $15.3 billion and adjusted earnings of $4.20 to $4.24 a share. It had previously forecast net sales of $15 billion to $15.3 billion.

Analysts see fiscal-year net sales of $15.05 billion and adjusted earnings of $4.25 a share.

Write to Nicholas G. Miller at nicholas.miller@wsj.com.

(END) Dow Jones Newswires

April 22, 2026 06:37 ET (10:37 GMT)

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