DOW JONES NEWSWIRES
Mohawk Industries Inc.'s (MHK) first-quarter earnings rose 14%,
as the floor-covering maker's adjusted bottom line hit the top of
its downbeat guidance on continuing stabilization in revenue.
Mohawk makes tiling, carpet and hardwood flooring for both homes
and commercial locations. It gave a largely upbeat forecast for
earnings in the current quarter, predicting 87 cents to 97 cents a
share, mostly above the 87-cent average estimate from a survey of
analysts by Thomson Reuters.
Chairman and Chief Executive Jeffrey S. Lorberbaum noted the
company's virtually flat sales in the most recent period and
predicted the outlook would strengthen for the balance of the year.
Except for a one-quarter blip of growth a year ago, Mohawk revenue
has slid every quarter since 2006.
Winter is a slow period for Mohawk, and this season was marked
by particularly harsh weather and higher raw materials cost. Also,
the company predicted that an extended holiday shutdown at a
Chinese joint venture would also hurt results.
The company's bottom line has strengthened in recent quarters
after it increased prices on carpet, cut costs and extended its
international reach, though sales have failed to post reliable
increases. During the recession, it struggled to stay profitable as
the recession and hobbled housing market postponed remodeling and
construction projects.
Mohawk posted a profit of $23.4 million, or 34 cents a share,
from $20.5 million, or 30 cents a share, a year earlier. Excluding
restructuring charges, earnings rose to 42 cents a share from 35
cents. In February, it forecast earnings of 36 cents to 44 cents a
share, below the average estimate at the time.
Revenue decreased 0.3% to $1.34 billion. Analysts surveyed by
Thomson Reuters had expected $1.3 billion.
Gross margin inched up to 25.4% from 25.3%.
Its biggest segment--the namesake division that includes carpet,
hardwood and tile flooring--reported profit rose 2.5% as sales
slipped 3.5%. The Dal-Tile ceramic tile segment saw earnings jump
15% and sales creep up 0.9%.
Mohawk shares were up four cents at $63.21 after hours. Through
the close, the stock has risen 4.4% in the last year,
underperforming the growth in the market at large.
-By Joan E. Solsman, Dow Jones Newswires; 212-416-2291;
joan.solsman@dowjones.com