Hy Forklift
Source: Hyster-Yale Materials Handling.

Most investors who look to profit from vehicles focus on high-profile automakers, whose products they see every day out on the road. By contrast, Hyster-Yale Materials Handling (NYSE:HY) is virtually unknown among mainstream investors, yet as a major player in the forklift and lift-truck industry, Hyster-Yale counts Ford and other high-profile customers among its clientele. As demand rises for its lift trucks, as well as for parts to service competing brands, Hyster-Yale has an opportunity to capitalize on a strengthening global economy. Yet coming into its third-quarter earnings report, the company has some investors nervous that sluggishness in some areas of the world could hold back its growth, at least in the short run.

In general, manufacturers of forklifts and other lift-trucks need their customers in the construction, manufacturing, and transportation industries to do well and therefore make larger orders. As a relatively new spinoff from industrial conglomerate NACCO Industries, Hyster-Yale is still getting used to trading as an independent public company. Let's take an early look at what's been happening with Hyster-Yale over the past quarter and what we're likely to see in its report.

Stats on Hyster-Yale

Analyst EPS Estimate

$1.47

Change From Year-Ago EPS

5%

Revenue Estimate

$669.9 million

Change From Year-Ago Revenue

4%

Earnings Beats in Past 4 Quarters

2

Source: Yahoo! Finance.

What's next for Hyster-Yale earnings?
Hyster-Yale has struggled to satisfy investors with its earnings lately, as projections for third-quarter earnings have fallen by almost 10% in recent months, and substantial drops in full-year 2014 and 2015 projections have also eaten into investor confidence. The stock has plunged almost 18% since late July in response.

Hy Lifter

Source: Hyster-Yale Materials Handling.

Much of the disappointment concerning Hyster-Yale came after the company reported its second-quarter results back in July. Revenue climbed 3.8% to $684.7 million, but year-over-year net income dropped by more than 9%, and even that reduced figure was bolstered by a $17.7 million pre-tax gain on the sale of a facility in Brazil. Overall, Hyster-Yale reported strength in its core North American and European markets, but decreases in Brazil and the rest of Latin America ate into revenue gains. Moreover, the company said it expects operating profits to improve in the second half of the year, citing likely higher volumes as well as margins on its parts business.

More broadly, though, Hyster-Yale is trying to boost its market share from its current No. 3 global position of about 8%. The company sees a five-point process helping it along those lines, including an emphasis on identifying specific customer needs, reducing costs of ownership of its equipment, creating a better distribution network, improving warehouse management, and focusing on international markets in Asia, especially China, India, and Japan.

The big question for Hyster-Yale is whether favorable macroeconomic trends will continue. Some fears about moves from the Federal Reserve to pull back on its economic stimulus efforts have industry followers nervous about whether global economic growth could suffer as a result. So far, though, the U.S. economy appears poised to keep firing on all cylinders, and with the U.S. accounting for more than half of Hyster-Yale's overall sales, domestic strength should be sufficient to offset any overseas weakness as long as the Fed's future moves don't hurt the U.S. recovery.

Hy Lifter

Source: Hyster-Yale Materials Handling.

In the Hyster-Yale earnings report, watch to see how well the company is able to follow through on its earlier guidance about stronger activity during the second half of the year. If Hyster-Yale falls short of its hopes, then investors might be even less willing to stick with the company despite an aggressive stock repurchase program and an extremely low earnings multiple.

Dan Caplinger owns shares of Ford. The Motley Fool recommends and owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.