Lift truck and material handling solutions manufacturer Hyster-Yale Materials Handling (NYSE: HY) fell short of the market’s revenue expectations in Q1 CY2025, with sales falling 13.8% year on year to $910.4 million. Its non-GAAP profit of $0.49 per share was in line with analysts’ consensus estimates.
Is now the time to buy Hyster-Yale Materials Handling? Find out by accessing our full research report, it’s free.
Hyster-Yale Materials Handling (HY) Q1 CY2025 Highlights:
- Revenue: $910.4 million vs analyst estimates of $947.8 million (13.8% year-on-year decline, 3.9% miss)
- Adjusted EPS: $0.49 vs analyst estimates of $0.49 (in line)
- Adjusted EBITDA: $35 million vs analyst estimates of $37.2 million (3.8% margin, 5.9% miss)
- Operating Margin: 2.3%, down from 7.9% in the same quarter last year
- Market Capitalization: $703.8 million
Company Overview
Playing a significant role in the development of the hydraulic lift truck, Hyster-Yale (NYSE: HY) designs, manufactures, and sells materials handling equipment to various sectors.
Sales Growth
Examining a company’s long-term performance can provide clues about its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Unfortunately, Hyster-Yale Materials Handling’s 5.1% annualized revenue growth over the last five years was tepid. This fell short of our benchmark for the industrials sector and is a rough starting point for our analysis.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Hyster-Yale Materials Handling’s annualized revenue growth of 5.8% over the last two years aligns with its five-year trend, suggesting its demand was consistently weak. 
This quarter, Hyster-Yale Materials Handling missed Wall Street’s estimates and reported a rather uninspiring 13.8% year-on-year revenue decline, generating $910.4 million of revenue.
Looking ahead, sell-side analysts expect revenue to decline by 5.1% over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and indicates its products and services will see some demand headwinds.
Unless you’ve been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories.
Operating Margin
Hyster-Yale Materials Handling was profitable over the last five years but held back by its large cost base. Its average operating margin of 2% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.
On the plus side, Hyster-Yale Materials Handling’s operating margin rose by 3.8 percentage points over the last five years, as its sales growth gave it operating leverage.
This quarter, Hyster-Yale Materials Handling generated an operating profit margin of 2.3%, down 5.6 percentage points year on year. Since Hyster-Yale Materials Handling’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
Hyster-Yale Materials Handling’s EPS grew at an astounding 19.3% compounded annual growth rate over the last five years, higher than its 5.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
We can take a deeper look into Hyster-Yale Materials Handling’s earnings quality to better understand the drivers of its performance. As we mentioned earlier, Hyster-Yale Materials Handling’s operating margin declined this quarter but expanded by 3.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For Hyster-Yale Materials Handling, its two-year annual EPS growth of 161% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.
In Q1, Hyster-Yale Materials Handling reported EPS at $0.49, down from $2.93 in the same quarter last year. This print was close to analysts’ estimates. We also like to analyze expected EPS growth based on Wall Street analysts’ consensus projections, but there is insufficient data.
Key Takeaways from Hyster-Yale Materials Handling’s Q1 Results
We struggled to find many positives in these results. Its revenue missed significantly and its EBITDA fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 2.5% to $39.50 immediately following the results.
The latest quarter from Hyster-Yale Materials Handling’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
