Mohawk earnings jump to record high in first quarter

Four acquisitions this year to boost profits in 2017

Calhoun, Ga.-based Mohawk Industries is the largest flooring manufacturer in the world.
Calhoun, Ga.-based Mohawk Industries is the largest flooring manufacturer in the world.

The world's biggest floor covering company boosted first quarter profits by 16 percent to a record $201 million, or $2.68 per share.

Mohawk Industries, Inc. said excluding restructuring, acquisition expenses and other charges, net earnings in the quarter totaled $203 million, or $2.72 per share, which was a penny better than the average analysts' estimate reported by Zacks Equity Research.

Net sales for the first quarter were $2.22 billion, up 2 percent from a year ago and 4 percent better when applying constant days and currency rates.

"Our sales and earnings per share set records for the first quarter with volume, mix and productivity adding approximately $60 million to operating income," said Jeff Lorberbaum, chief executive of the Calhoun, Ga.-based carpet and vinyl floor maker. "Our first quarter sales grew as expected, with Flooring North America and rest of the world outpacing global ceramic growth on a constant days and currency basis."

photo In this 2014 staff file photo, Jeffrey Lorberbaum, CEO of Mohawk Industries, speaks to the Chattanooga Rotary Club at the Chattanooga Convention Center.

Mohawk is investing more than $750 million to expand its production in most product categories and is preparing to enter the European carpet tile and counter top markets as well as the Russian sheet vinyl business.

"In April, we completed the acquisition of two small ceramic manufacturers in Europe and a carpet nylon polymerization plant in the U.S.; in May, we anticipate purchasing a mine for our U.S. ceramic operations." Lorberbaum said "We are initiating many price increases across our portfolio which should cover our material costs in the third quarter."

Lorberbaum said the company is "optimistic about the economy, the flooring industry and Mohawk's potential" and he predicts earnings in the second quarter should rise to $3.53 to $3.62 per quarter, including the acquisitions.

"In the third quarter, higher pricing and productivity as well as lower currency headwinds should improve our results" even more," Lorberbaum said.

Prior to the release of the quarterly earnings report, Mohawk shares rose Thursday by another 53 cents per share to an all-time record high of $238.88 per share. Shares of Mohawk are up nearly 14 percent from a year ago.

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