Hyster-Yale (NYSE:HY) reported sequential improvement in its third-quarter 2026 results and outlined a cost-reduction program targeting at least $100 million in annual savings and avoided expenses by 2029, as the lift truck maker works to turn stronger orders into shipments.
Revenue rose 2% from the second quarter to $827 million as higher shipment volumes more than offset lower parts sales, Director of Investor Relations and Treasury Andrea Sejba said on the company’s earnings call. Operating results improved by $10 million, and both the operating loss and net loss narrowed sequentially. Adjusted EBITDA returned to positive territory at $6 million.
Bookings of $550 million were up 45% from a year earlier, while backlog remained steady at approximately $1.6 billion. Operating cash flow rose to $26 million, up $10 million from the second quarter, primarily reflecting stronger earnings and improved working capital management, Sejba said.
New cost program targets 2029
President and CEO Rajiv Prasad said Hyster-Yale launched a set of projects in the fourth quarter aimed at reducing costs, capital intensity and operational complexity. The plans include reshaping the product portfolio and route to market, consolidating plants and support facilities, and simplifying the organization.
The company is targeting at least $100 million in annual cost reductions at maturity in 2029, measured against 2026 results and in addition to savings from earlier programs. Prasad said the target includes both direct cost cuts and the mitigation of future expenses associated with higher volumes and inflation.
Implementation costs are estimated at no less than $50 million over the life of the programs and could include severance, impairment charges, contract terminations and other exit-related expenses. Some benefits are expected to begin in 2027, though Prasad said the timing and financial effects of individual actions could change as plans are finalized and required consultations and approvals are completed.
Among the first actions, Hyster-Yale is pausing its electric terminal tractor program globally and discontinuing an effort to establish Big Truck production in Greenville, North Carolina. Prasad said the company will continue to serve the U.S. market through its existing Big Truck manufacturing operations.
The company is also immediately ending development and production of hydrogen-related solutions, including its HydroCharge platform and associated fuel cell technology and engines. It plans instead to accelerate investment in lithium-ion batteries and charging solutions.
Prasad said customers have experienced difficulties integrating trucks, batteries and chargers supplied by different companies. Hyster-Yale is developing battery systems and controls and working with charging partners to offer a more integrated system with a single point of service, he said.
Fourth-quarter outlook depends on shipments
Management expects fourth-quarter bookings to exceed both the third quarter of 2026 and the fourth quarter of 2025. Prasad said stronger orders should translate into meaningfully higher production and shipments, driving sequential revenue growth and improving the absorption of fixed manufacturing costs.
Hyster-Yale expects gross profit and gross margin to improve sequentially, although tariffs, inflation and competitive pricing are expected to offset some of the gains. Adjusted net income is expected to rise from the third quarter and return to positive levels. Reported operating results will include anticipated implementation costs from the new programs.
Prasad cautioned that converting orders into shipments is “not automatic.” During the third quarter, customer delivery schedules and production transitions associated with tariff mitigation and sourcing initiatives slowed the process, he said.
In response to an analyst’s question, Prasad said third-quarter revenue was below the company’s expectations, mostly in North America. He attributed roughly one-third of the shortfall to freight timing, a little more than one-third to customers delaying deliveries and just under one-third to component availability, including shortages of certain chips and boards. He said the freight issue was mostly resolved and that the company had eliminated most component issues for the fourth quarter.
Longer-term recovery and cash priorities
Prasad expects healthy demand and production in 2027 but said operating profit should improve more gradually than volumes because of cost pressures, competition and the time needed for growth initiatives to mature. He also said customers that had kept trucks longer than usual were beginning to replace aging fleets, and described the company’s sales pipeline as strong.
The company expects its 2025 restructuring program to deliver the full benefit of $40 million to $45 million in savings by year-end 2026. A completed realignment of its Nuvera business delivered $15 million in savings in 2025, Prasad said.
To preserve cash amid a slower-than-anticipated recovery, Hyster-Yale expects capital expenditures of $50 million to $60 million in 2026 and plans to limit spending to $40 million to $50 million in 2027. Its longer-term objectives include working capital of approximately 15% of revenue and operating profit of 7% over the business cycle.
Executive Chairman Al Rankin said bookings and the broader product portfolio provide a foundation for recovery, but shipment timing, product mix, tariffs and competitive pricing continue to affect the pace of improvement. “A cyclical recovery is not sufficient,” he said. “The market has changed, and our operating model is changing with it.”
About Hyster-Yale (NYSE:HY)
Hyster-Yale, Inc is a global manufacturer of materials-handling equipment. Through its Hyster and Yale brands, the company designs, engineers, manufactures, sells and services lift trucks and related warehouse equipment used to move, store and manage materials in industrial, manufacturing, distribution and logistics operations.
Its product portfolio includes electric, internal-combustion engine and other lift trucks, as well as warehouse equipment such as pallet trucks, stackers and reach trucks.
