Calhoun, Ga.-based Mohawk Industries Inc. announced a mixed year for 2011.
While the company posted higher sales than the prior year, net income fell slightly from 2010 as Mohawk spent millions of dollars on capital expenses to restructure its operations as the rising cost of oil ate into its operating margins.
Mohawk posted earnings of $43 million during the fourth quarter, or 62 cents per share, down 6 percent from a year ago. Company sales of $1.4 billion represented a 9 percent revenue gain over the same period in 2010.
The fourth-quarter sales gains capped off a slightly less profitable year during which time Mohawk's net income fell about $10 million to $174 million, or $2.52 per share, even as the manufacturer sold $5.6 billion worth of carpet and hard surface flooring, a 6 percent gain over 2010 sales.
Excluding what the company called unusual items such as start-up expenses at new international operations, however, Mohawk grew its earnings from ongoing operations by 16 percent for the year and booked $202 million in profits, or $2.92 per share, compared to $173 million, or $2.52 per share, in 2010 earnings.
Jeff Lorberbaum, chairman and CEO of Mohawk, said all segments were showing sales growth for the last two quarters, with commercial carpet sales growing at a faster pace.
"We expanded our filament extrusion and carpet tile capacity to satisfy the growing demand," Lorberbaum said. "We reduced our costs with improved manufacturing productivity, re-engineered processes and a more streamlined infrastructure."
With its 2011 price increases in place and more on the way to offset the rising cost of petroleum supplies, Lorberbaum sees more profits on the horizon for 2012, he said.
"The flooring industry should continue its improvement throughout 2012," Lorberbaum said. "We have many initiatives to strengthen our product offering, expand our geographical reach, recover raw material inflation and reduce our costs. Our financial structure is strong and we can take advantage of new opportunities."
Adjusted for one-time expenses, Mohawk met analysts estimates of about 72 cents per share. The company expects earnings of between 47 cents and 57 cents per share in the first quarter.