Hyster-Yale (HY) Q4 2018 earnings summary

Executive summary

• 2018 revenue rose 10.0% to $3,174.4 million, while operating profit fell to $38.8 million from $74.1 million and net income attributable to stockholders declined to $34.7 million from $48.6 million.

• Higher lift truck and parts volumes, favorable currency and pricing supported sales; material and manufacturing cost inflation, tariffs, increased expenses and investment weighed on profit.

Financial highlights

• Gross profit was $497.1 million versus $502.6 million; SG&A rose to $458.3 million from $428.5 million.

• Operating cash flow was $67.6 million, down from $164.7 million, primarily reflecting working-capital changes and lower net income.

• Lift truck backlog reached 43,900 units valued at $1.19 billion at Dec. 31, 2018, versus 33,800 units and $860 million a year earlier; substantially all was expected to ship in 2019.

Outlook and guidance

• 2019 consolidated operating profit was expected to increase significantly, with improvement concentrated in H2; lift truck business income was expected to improve YoY despite a weaker H1.

• Pricing and margin recovery from 2018 inflation and discounted backlog deals was expected by Q3-Q4 2019; supplier issues were expected to be mostly resolved by midyear.

• Lift truck and Bolzoni operating profit targets were 7%; Nuvera targeted break-even in Q4 2019 and FY2020, with stronger earnings expected in 2021-2023.

• 2019 planned capital expenditures were $79.1 million, primarily for product development, IT, manufacturing facilities and equipment.