Otis grew sales 7 percent as its service business carried the quarter

Otis leaned on the elevators it has already sold.

The company reported net sales of $3.9bn for the second quarter, up 7 percent, in results dated July 22. Almost all of the growth came from Service, the business of maintaining, repairing and upgrading installed elevators, where net sales rose 11 percent and organic sales rose 9 percent, a pace the company said matched its fastest since Otis was spun off. New Equipment, the business of selling and installing new units, was flat, though it improved from the first quarter.

The two earnings numbers pulled apart. GAAP diluted earnings per share rose 13 percent to $1.12, while adjusted EPS fell 4 percent to $1.01, and adjusted operating profit fell $25m even as the GAAP figure rose $28m.

Modernization is the order book to watch. Orders to upgrade old elevators rose 9 percent at constant currency, and the modernization backlog rose 24 percent. Chair and Chief Executive Judy Marks said an aging installed base and customers' increasing focus on reliability and uptime were driving demand for both modernization and repair. Otis bought back about $400m of stock in the quarter.