Hyster-Yale (HY) Q4 2017 earnings summary

Executive summary

• FY17 revenue rose 12.3% to $2,885.2M as lift-truck shipments, parts volume and pricing improved; operating profit more than doubled to $76.0M.

• Net income attributable to stockholders increased to $48.6M from $42.8M, including $19.8M of favorable HYGFS equity income and $38.2M of Tax Reform Act expense.

• Fourth-quarter revenue was $795.5M and operating profit $16.4M; the quarter recorded a $2.4M attributable net loss and diluted EPS of $(0.15), including Tax Reform Act impacts.

Financial highlights

• FY17 gross profit was $502.6M versus $427.5M; lift-truck gross profit increased on higher shipments, production efficiencies and improved pricing, net of material inflation.

• FY17 diluted EPS was $2.94 versus $2.61; reported income tax rate was 47.9%, including Tax Reform Act effects.

• Operating cash flow was $164.7M versus cash use of $48.9M in 2016; year-end cash was $220.1M versus $43.2M.

• Unit bookings reached 96.5K and year-end backlog 33.8K units, valued at $860M; substantially all backlog was expected to ship in FY18.

Outlook and guidance

• FY18 global lift-truck market expected comparable to 2017, with modest China contraction offset by moderate growth in the Americas, EMEA and Asia-Pacific; operating profit expected to increase YoY.

• FY18 net income expected to increase substantially, mainly on the absence of 2017 Tax Reform Act adjustments; lift-truck effective tax rate forecast at 21%–24%.

• Americas FY18 shipments, revenue, parts sales and operating profit expected to increase; first-half profit may be modestly lower YoY, with second-half improvement more than offsetting it.

• EMEA shipments, revenue and operating profit expected to rise; first-half profit expected lower YoY as pricing and material-cost increases take effect, with improvement in H2.

• Bolzoni forecast higher FY18 revenue, operating profit and net income; Nuvera operating losses expected to narrow modestly, with break-even targeted within two years.