The industrial sector has started to pick up steam after a long down period, and that has led some areas of the economy that often go unseen to start performing better. Hyster-Yale Materials Handling (NYSE:HY) manufactures forklifts, and now that its customers are starting to do better in their own businesses, they've started to spend more money on capital expenditures that can turn into better prospects for Hyster-Yale's future.

Coming into Friday's third-quarter financial report, Hyster-Yale investors were prepared for profits to decline from year-ago levels but wanted solid top-line gains. Hyster-Yale did a lot better than that, crushing sales growth estimates and boosting its profit from year-earlier figures. Let's look more closely at how Hyster-Yale gave its shareholders a nice surprise.

Various Hyster-Yale lift trucks, one lifting a pallet, another being worked on by a technician.

Image source: Hyster-Yale.

Hyster-Yale picks up the pace

Hyster-Yale's third-quarter results looked strong. Revenue jumped almost 10% to $691.1 million, doubling the 5% growth rate that most of those following the stock had anticipated from the forklift manufacturer. Net income climbed by about a third to $16.5 million, and earnings came in at $1 per share, or more than twice the consensus forecast for $0.43 per share in earnings.

Fundamentally, Hyster-Yale's core business continued to chug forward. The lift-truck segment saw sales gains of nearly 10%, with especially strong growth in the Europe, Middle East, and Africa area, where segment revenue climbed 20%. Sales in the key Americas segment were up 9% from year-earlier levels, and only the Asia-Pacific region sagged behind, with sales falling 16% there. From an operating profit standpoint, lift trucks pulled their weight with a rise of more than a sixth. Only once extraordinary items were taken into account did net income for lift trucks fall from Hyster-Yale's results in the third quarter of 2016. Lift truck shipments were up by 1,700 to 22,000 units for the quarter, and bookings picked up 1,400 units to 21,800. Backlog figures came in at 35,100, representing about $860 million in value.

It was also good to see signs of improvement in Hyster-Yale's other business. The Bolzoni unit saw revenue jump 22% from a year ago, and modest segment net income of $1.9 million reversed a year-ago loss for the attachment specialist. Nuvera continued to lose money, but the fuel cell stack and engine specialist narrowed its losses by about a third, helping to limit its downward impact on Hyster-Yale's overall bottom line.

What's ahead for Hyster-Yale?

Hyster-Yale's outlooks for its businesses were upbeat. In the fork lift area, Hyster-Yale has several strategic goals, and it's moving forward on most of them. The company wants to emphasize larger lift trucks that can move larger items like shipping containers. Items like stackers and counterbalanced trucks should help Hyster-Yale serve customers in multiple industries. The fork lift maker believes unit shipments and parts revenues should climb in the fourth quarter compared to year-earlier numbers, and despite higher commodity costs for raw materials, that influence should moderate in 2018. Hyster-Yale sees similarly favorable global markets in 2018, but higher interest expense and a lack of one-time tax benefits could weigh on relative performance.

At Bolzoni, Hyster-Yale sees good performance in Europe and the Americas continuing. Cost-saving efforts should also help the unit take greater advantage of its sales gains, boding well for earnings in the near future. Nuvera is making slow progress, and the company is trying to find early adopters with special needs for which its current lineup of products is best suited. High costs will weigh on results for a while, but Nuvera is working to cut those expenses as well with the hope of breaking even by late 2019.

Hyster-Yale investors were quite happy with the company's performance, and the stock climbed 5% at midday on Friday following the announcement. If the economy continues to cooperate, then Hyster-Yale has a chance at expanding its business more aggressively, with an idea toward maximizing long-term growth.

Dan Caplinger has no position in any of the stocks mentioned. The Motley Fool recommends Hyster-Yale Materials Handling. The Motley Fool has a disclosure policy.