Hyster-Yale Down to Strong Sell


On Dec 28, Zacks Investment Research downgraded Hyster-Yale Materials Handling, Inc. (HY), a manufacturer of trucks and other vehicles, to a Zacks Rank #5 (Strong Sell).

Why the Downgrade?

On Oct 30, Hyster-Yale reported a 5.4% decline in its third-quarter 2013 earnings to $1.40 per share. The year-over-year decrease was led by higher income tax expense. The result also missed the Zacks Consensus Estimate of $1.48.

Though, revenues in the reported quarter increased 10% year over year to $643.9 million, it fell short of the Zacks Consensus Estimate of $662 million. Sales in the Europe and Asia-Pacific region declined in the quarter. However, revenues in the Americas segment rose due to increase in unit price.

Hyster-Yale expects net income in the fourth quarter of 2013 to fall from the prior-year quarter level. The company anticipates an increase in capital expenditure in 2013, largely due to information technology improvement in Brazil.

The Latin America market weakened during the reported quarter. This weakness is expected to persist in the fourth quarter of 2013. Hyster-Yale also estimates that the demand in Europe will remain weak due to volatile macroeconomic conditions. Moreover, increase in material costs will hurt shipments and parts volumes in all the markets in the fourth quarter of 2013 and in 2014.

Following the third-quarter earnings announcement, Hyster-Yale’s Zacks Consensus Estimate for 2013 has gone down 3.7% to $5.78 per share. Likewise, the Zacks Consensus Estimate for 2014 dropped 7.8% to $6.45.

Other Stocks to Consider

Better-ranked stocks in the industrial products sector are Columbus McKinnon Corporation (CMCO), Aggreko plc (ARGKF) and Hudson Technologies Inc. (HDSN). All these stocks hold a Zacks Rank #2 (Buy).

Read the Full Research Report on HDSN
Read the Full Research Report on CMCO

Zacks Investment Research

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