Otis Worldwide Corp ( OTIS ) reported first-quarter fiscal 2024 sales growth of 2.7% year-over-year to $3.437 billion, missing the consensus of $3.455 billion.

Adjusted operating profit increased to $561 million from $518 million, and the margin expanded by 80 bps to 16.3%, led by favorable segment performance and mix.

New Equipment sales of $1.28 billion fell 2.1% Y/Y. Operating margin expanded 20 bps to 5.5%. New Equipment orders declined 10% Y/Y at constant currency due to weakness in the Americas and China. The new equipment backlog fell by 2% in the quarter.

Service sales increased 5.8% Y/Y to $2.157 billion, and the operating margin expanded 70 bps to 24.2%

The Farmington, Connecticut-based company’s maintenance portfolio units increased by 4.1%; Mod orders were up 13% Y/Y, and backlog was up 15% Y/Y at constant currency.

Adjusted EPS improved to $0.88 from $0.80 a year ago, beating the consensus of $0.87.

Otis’s cash flow from operations of $171 million for the quarter decreased by $107 million Y/Y, and the adjusted free cash flow was $155 million. The company repurchased shares of $300 million during the quarter.

“After delivering a strong first quarter, we are raising our EPS outlook driven by operational performance and increasing our share repurchase target to $1 billion for the year. With confidence in our long-term strategy, we have raised the quarterly dividend 14.7%, reinforcing our commitment to creating shareholder value,” commented Judy Marks, Chair, CEO & President.

Yesterday, Otis declared a quarterly dividend of $0.39 per share of common stock, representing a 14.7% increase. The dividend will be payable on June 7 to shareholders of record on May 17.

2024 Outlook: Otis revised its outlook for adjusted EPS to $3.83-$3.90 (prior $3.80-$3.90) versus the consensus $3.87; continues to see net sales of $14.5 billion-$14.8 billion versus the consensus of $14.70 billion, and organic sales up 3%-5%.

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

Price Action: OTIS shares are trading lower by 4.47% at $93.11 at the last check Wednesday.