Mohawk 4Q Profit Up 14% On Stabilizing Sales

   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; [e-mail]