Why Shares of Hyster-Yale Are Soaring This Week

What happened

Providing a stark turnaround from its performance during the same period last year, Hyster-Yale (HY -2.39%) reported strong fourth-quarter 2022 financial results on Monday after the market closed. Investors were exuberant after learning of the company's recent performance and have lifted shares of the forklift and material handling equipment manufacturer higher throughout the week.

As of 12:36 p.m. ET, shares of Hyster-Yale have risen 47.2% since the end of last Friday's trading session, according to data provided by S&P Global Market Intelligence.

So what

Setting a new company record for quarterly revenue, Hyster-Yale reported Q4 2022 consolidated revenue of $985.2 million, an 18.7% increase over what the company reported during the same period last year. Besides higher pricing, management attributed the sales growth to "favorable sales mix across all lift truck segments."

The strong turnaround wasn't limited to the top of the income statement. Booking diluted earnings per share of $0.44, Hyster-Yale achieved a sharp increase over the -$6.14 diluted EPS that the company reported in Q4 2021.

While the company didn't provide specific financial guidance for 2023, investors are surmising that the future looks bright. Hyster-Yale stated that it made progress in moving its lower-margin products out of backlog during the last quarter.

In addition, the company reported that the average sales price per unit in backlog rose from $27,350 in Q4 2021 to $36,533 in Q4 2022. Moreover, management optimistically stated in the press release accompanying the financial results that "average unit margins are expected to continue to improve, including into 2024, when new bookings with anticipated higher margins are expected to be produced."

Now what

With a record performance on the top line and a dramatic turnaround on the bottom line, it's hardly a surprise to find shares of Hyster-Yale rising this week. With supply chain constraints easing, it's very possible that the company continues to improve from its weaker performance in 2021.