Hyster-Yale Materials Handling, Inc.
) reported fourth-quarter 2013 earnings at $1.53 per share, which
marked a 21% year-over-year decline. Results however, surpassed
the Zacks Consensus Estimate of $1.47.
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Revenues in the quarter increased 10% year over year to $717.9
million driven by increases in unit volumes, mainly in the
Americas and Europe. Price increase also favored revenue growth,
partly offset by unfavorable foreign currency movements. Revenues
came ahead of the Zacks Consensus Estimate of $693 million.
Revenues grew 12.5% year over year to $462 million in the
Americas, driven by favorable effect of unit price increase and
rise in fleet services and shipments. Sales in Europe increased
15% to $202.5 million from $176 million in the year-ago quarter.
However, revenues in the Asia-Pacific region were $53 million,
down from $65 million in the year-ago quarter.
Cost of sales was $592 million in the said quarter compared with
$544.7 million in the prior-year quarter. Gross profit increased
17% year over year to $126 million. Consequently, gross margin
expanded 100 basis points (bps) to 17.5% year over year.
Selling, general and administrative expenses increased 16% to
$90.9 million on a year-over-year basis. The rise was primarily
due to higher marketing expenses in the Americas and Europe to
support the company's five strategic initiatives and higher
incentive compensation expenses.
Operating profit in the reported quarter grew 20.7% year over
year to $35 million attributable to an increase in unit and parts
volumes as well as production efficiencies. These were partially
offset by higher selling, general and administrative expenses.
Operating margin expanded 50 bps to 4.9% in the quarter.
Worldwide backlog was around 28,200 units as of Dec 31, 2013
compared with 27,300 units as of Dec 31, 2012. In the fourth
quarter of 2013, worldwide new unit shipments were 22,700 units
compared with 20,100 units in the year-earlier quarter.
Hyster-Yale ended 2013 with cash and cash equivalents of $175.7
million, up from $151.3 million as of 2012-end. Cash flow from
operations was $152.9 million as of Dec 31, 2013, against $128.7
million as of Dec 31, 2012.
Fiscal 2013 Performance
For full-year 2013, Hyster-Yale reported earnings per share (EPS)
of $6.54, up around 12% from $5.83 in 2012. The results beat the
Zacks Consensus Estimate of $5.78.
Revenues for the year increased 8% year over year to $2.7
billion, surpassing the Zacks Consensus Estimate of $2.6 billion.
Hyster-Yale expects the global market for forklift trucks to grow
slightly in 2014. Market growth and a strong ending backlog
in 2013 will aid unit shipments and parts volumes increment. The
majority of this increase is expected to come from the Americas,
with smaller increases in the Asia-Pacific and European unit
The company anticipates sales to improve moderately in 2014.
Operating profit is also expected to increase on the back of
favorable effect of strategic initiatives and product
enhancements. A lower estimate for equity incentive compensation
is also projected to contribute toward a higher operating profit.
Cash flow for 2014 is expected to decline primarily due to
increase in capital expenditures resulting from the construction
of a new plant in Brazil.
Hyster-Yale will benefit from new programs and platforms that are
expected to be developed and launched over the next few years
based on longer-term segment needs or technological change
opportunities. Hyster-Yale also remains focused on improving
margins in its internal combustion engine business through the
execution of its five strategic initiatives. However, material
costs as well as marketing and employee costs are expected to
increase in 2014.
Notably, the company anticipates the demand in Europe to remain
weak, given the stressed macroeconomic conditions there. Increase
in capital expenditures, largely due to information technology
improvement in Brazil will also hurt growth. Moreover, volatility
in foreign exchange rates and an overall uncertain economic
environment are the other headwinds.
Cleveland, Ohio-based Hyster-Yale engages in the design,
engineering, manufacture, sale and servicing of a comprehensive
line of lift trucks and aftermarket parts. At present, it has a
Zacks Rank #3 (Hold).
However, some better-ranked stocks in the same industry include
Altra Industrial Motion Corp.
Barnes Group Inc.
). All of these have a Zacks Rank #2 (Buy).