Kim Gavin

Mohawk Industries posted a profit during the third quarter despite a 21 percent drop in sales.

The Calhoun, Ga.-based flooring manufacturer reported net earnings of $34.3 million and 50 cents per share compared to a net loss of more than $1.4 billion and a loss per share of $21.70, according to Mohawk's financial report released after the market closed Thursday.

Shares closed at $46.48, up 5.6 percent from Wednesday's close.

Company officials said a preliminary goodwill and impairment charge last year of more than $1.2 billion led to the 2008 losses.

Jeff Lorberbaum, Mohawk chairman and chief executive officer, attributed the improvement to changes to help company better deal with the recession and the housing slump.

"Our gross margin of 27 percent, an improvement of almost 200 basis points over last year benefited from lower raw material and freight costs, personnel reductions, cost containment measures and plant consolidations," he said. "Investments in new products, research and development and capital expenditures are being made to improve sales, efficiencies, quality and service."

Mohawk's sales of $1.4 billion for the quarter remain down 21 percent from the $1.8 billion generated during the same time last year.

Sales have been hit hard all across the flooring industry due mostly to continuing low home sales, soft business investment and weak consumer discretionary spending.

During the first nine months of the year, Mohawk remained in the red with a net loss of $25.3 million or 37 cents per share. Despite the negative return, the loss is an improvement from the loss of $1.3 billion or $19.45 per share for the first nine months of 2008.

Sales so far this year totaled just under $4 billion, a 26 percent drop from the $5.3 billion reported over the same time in 2008.

Kim Gavin, executive editor of Floor Covering Weekly, said Mohawk's profit are proof the flooring and tile company has taken measures to respond to the slumping economy.

"It's just evidence they have gotten their costs in line and are really working on overhead," Ms. Gavin said. "They have really been working on that. Every business in the industry has been working on that, and this is evidence that it is paying off."