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Hyster-Yale (HY) Slips to 52-Week Low on Market Weakness

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Shares of Hyster-Yale Materials Handling, Inc.HY hit a 52-week low of $48.10 on Jan 11, before closing higher at $48.72. Shares of Hyster-Yale have lost 24% of their value since reporting third-quarter results on Oct 28.

What Led to the Drop?

The company's third-quarter earnings dropped 25% year over year to $1.28 as a strong U.S. dollar and weak Brazilian economy continued to affect the company's results.

Going forward, the Americas, which otherwise witnessed reasonably strong demand through the first three quarters of 2015, is expected to have slowed down in the fourth, while the Brazilian market is expected to have remained depressed in the final quarter of the year. In the fourth quarter, the Europe, Middle East and Africa market is expected to have grown moderately year over year, driven mainly by increases in Western Europe. Eastern Europe, Middle East and Africa markets are expected to generally decline while the Russian market is unlikely to recover from its depressed levels.

However, revenues from Europe are expected to decline year over year in the fourth quarter of 2015 as improved volumes are more than offset by unfavorable currency translation and a shift in mix to lower-priced lift trucks.

The Asia-Pacific market is expected to be down in the fourth quarter due to depressed demand in China and Japan, only partially offset by modest growth in the other markets. Fourth-quarter 2015 results for Asia-Pacific are expected to be lower than the fourth quarter of 2014 due to a shift in mix to lower-margin products, the expected unit volume decline and higher operating expenses as a result of market share gain initiatives.

Due to these market conditions, Hyster-Yale expects consolidated unit shipments to decline in the fourth quarter of 2015. In addition, as a result of a shift in sales mix to lower-priced lift trucks and currently weak foreign currencies, consolidated revenues are expected to decline in the fourth quarter of 2015 compared with the prior-year quarter.

The company expects fourth-quarter 2015 lift truck segment operating profit to be substantially lower than the prior year. Fourth-quarter 2015 net income in the lift truck business is also expected to decline, primarily due to operating profit declines and a higher effective income tax rate.

Hyster-Yale currently carries a Zacks Rank #3 (Hold).

Stocks to Consider

Some better-ranked stocks in the sector include Dycom Industries Inc. DY , Chicago Bridge & Iron Company N.V. CBI and Primoris Services Corporation PRIM . While Dycom sports a Zacks Rank #1 (Strong Buy), Chicago Bridge and Primoris Services carry a Zacks Rank #2 (Buy).

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CHICAGO BRIDGE (CBI): Free Stock Analysis Report

PRIMORIS SERVCS (PRIM): Free Stock Analysis Report

DYCOM INDS (DY): Free Stock Analysis Report

HYSTER-YALE MAT (HY): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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