Hyster-Yale NYSE: HY said first-quarter results reflected a still-challenging lift truck market, tariff pressure and a customer shift toward lighter-duty, lower-priced equipment, but management pointed to improving bookings and expected second-half profitability as demand begins to recover.
Andrea Saba, director of investor relations and treasury, said bookings rose 7% sequentially from the fourth quarter, continuing an improvement from what the company described as a cyclical low in the third quarter of 2025. Backlog increased modestly, although shipments had not yet reflected the better order activity.
Revenue declined to $795 million in the quarter. Saba said the decrease was driven primarily by the normalization of excess backlog and a mix shift toward lighter-duty, lower-priced trucks. She said customers are increasingly choosing standard configurations and “fit-for-purpose solutions” rather than higher-priced traditional models.
The company reported an adjusted operating loss of $26 million, including approximately $30 million of gross tariff costs. Saba said pricing and cost actions provided partial offsets, but tariffs and mix pressures outweighed those benefits in the quarter.
Management Expects Second Quarter to Mark Low Point
Looking ahead, Saba said Hyster-Yale expects 2026 to improve compared with 2025, with profitability in the second half of the year. She said the company anticipates the second quarter will represent the low point for both operating profit and net income, as tariff costs are expected to increase before mitigation actions take effect.
“Stronger bookings, backlog growth, and ongoing cost reductions are expected to drive meaningful improvement in the second half of the year,” Saba said. Based on that progression, the company expects to deliver a modest consolidated operating profit for the full year despite a loss in the first half.
Operating cash flow followed typical seasonal patterns, with $33 million of cash used in operations, a slight improvement from the same period a year earlier. Saba also said inventory management improved, with finished goods inventory down from last year as production was better aligned with demand.
Tariffs Remain a Major Headwind
President and Chief Executive Officer Rajiv Prasad said tariffs have significantly affected Hyster-Yale’s cost structure. Since “Liberation Day” in 2025, the company has incurred approximately $130 million of direct tariff-related costs, excluding indirect effects such as supplier price increases and higher steel costs.
Prasad said Hyster-Yale’s built-to-order manufacturing model creates a lag between tariff implementation and price realization, meaning cost recovery occurs over the order and delivery cycle rather than immediately.
The company has applied for approximately $40 million in refunds related to previously paid IEEPA tariffs through the U.S. Customs and Border Protection CAPE process and plans to seek $15 million to $20 million in reimbursements from suppliers. Prasad said those potential recoveries were not included in first-quarter results or the company’s outlook, and the timing and ultimate amount remain uncertain.
Prasad said the company expects its effective tariff rate in 2026 to increase by approximately 6% compared with 2025. In response to an analyst question, he said mitigation will come primarily through pricing, with about two-thirds of the impact expected to be addressed through pricing actions and about one-third through cost actions, including supplier work and component sourcing changes.
Product Shift Aims at Value and Standard Segments
Prasad said the lift truck market continues to favor lighter-duty, lower-priced equipment, a shift he described as more pronounced and longer-lasting than in prior cycles. The company is responding by expanding standard and value offerings, especially within its core 1-ton to 3.5-ton counterbalance product line.
He said these products are built on modular, scalable platforms that use common architecture, shared components and flexible manufacturing. While the transition has reduced shipments of higher-priced traditional models in the near term, Prasad said the new products are gaining traction and are expected to support future volume growth.
During the question-and-answer session, Prasad said the 1-ton to 3.5-ton truck range is typically about one-third of Hyster-Yale’s volume and about one-third of the market. He said the company is now shipping only modular scalable trucks in that internal combustion range, apart from one legacy model for certain emerging markets.
Prasad said Hyster-Yale currently has “somewhere around 40% of the market” covered with some level of scalability. He added that the company expects its new truck designs to meet target margin requirements and have a positive impact on margins.
In response to Northland Securities analyst Ted Jackson, management described the market as broadly divided into value, standard and premium segments. Hyster-Yale has historically been strong in premium trucks, while its newer offerings are intended to fill gaps in the standard and value segments, where customers are seeking more cost-effective solutions.
Bookings and Customer Engagement Improve
Prasad said unit bookings improved from approximately $380 million in the third quarter of 2025 to about $540 million in the fourth quarter and roughly $585 million in the first quarter. He said the company expects that trend to continue as customer engagement, request-for-quote activity and dealer confidence improve.
Prasad said many customers received equipment in 2023 and 2024 that had been ordered during prior periods, and that process has stabilized. He said customer fleets are somewhat older than desired, although utilization remains down in some markets because manufacturing activity in North America and Europe is weaker.
He also said dealer inventories have returned to normal conditions and that Hyster-Yale is seeing more stock orders from dealers for ready-to-sell units. Plans from large customers for the third and fourth quarters are also contributing to management’s confidence that both bookings and shipments will rise in the second half.
Automation, Batteries and CFO Search
Prasad highlighted several product and technology initiatives, including proximity detection and safety technologies, a new three-wheel standup counterbalance truck and the Hyster and Yale Route Runner, a nested pallet truck with a detachable motorized sled. He said the Route Runner was commercially launched in April and has already secured orders from several large beverage distributors.
On automation, Prasad said Hyster-Yale is seeing early success with targeted customers and is offering automated trucks under a material-handling-as-a-service model. He said the company plans to begin customer demonstrations of an automated stacker in the third quarter and release it for sale in the fourth quarter, with additional automated warehouse and counterbalance products expected in 2027 and 2028.
Prasad also said Hyster-Yale has begun shipping its own lithium-ion batteries to customers, particularly in Europe, and plans to initiate shipments in North America at the beginning of the third quarter. He said batteries are expected to become a significant part of the business in 2027.
Asked about the company’s chief financial officer search, Prasad said Hyster-Yale has evaluated its finance team and is discussing the desired profile with its board. He said the company expects to launch the search immediately after a board meeting in the coming weeks.
About Hyster-Yale NYSE: HY
Hyster-Yale Materials Handling, Inc is a global manufacturer and distributor of a wide range of industrial lift trucks, container handlers and aftermarket parts and services. Operating under the Hyster and Yale brand names, the company designs, engineers and assembles counterbalanced lift trucks, narrow-aisle trucks and specialty vehicles for clients in distribution, manufacturing, retail and warehousing.
The company's product portfolio includes electric, diesel and LPG-powered forklifts, as well as reach stackers, empty container handlers and terminal tractors.
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