Mohawk Industries' expansion into the European ceramic market this year paid off this summer with better-than-expected profits.
Led by a 33 percent jump in summertime sales following the purchase of three European hard surface floorcovering companies, Mohawk Industries said Thursday its third quarter net income nearly doubled to a record high.
The Calhoun, Ga.-based carpet maker, the largest floorcovering manufacturer in the world, earned $149 million, or $2.02 per share, from continuing operations on sales of $2 billion in the three months ended Sept. 28. In the same period a year ago, Mohawk earned $72 million, or $1.04 per share, on sales of $1.5 billion.
"This quarter we are reporting the highest adjusted earnings per share in company history," Mohawk CEO Jeff Lorberbaum said in releasing the quarterly earnings statement after the market closed Thursday.
The earnings were 12 cents per share better than the consensus estimate of industry analysts, pushing Mohawk's stock higher in after-hours trading Thursday night.
Most of the sales gains came from Mohawk's purchases in the past year of the Pergo, Marazzi and Spano brands. In April, Mohawk closed its $1.5 billion acquisition of ceramic-tile manufacturer Marazzi Group. In January, Mohawk bought Pergo for $150 million and Belgium-based panel board maker Spano Invest NV for about $168 million.
Third quarter carpet sales for Mohawk were up about 3 percent and ceramic sales were up 84 percent over a year ago.
For the first nine months of the year, net sales were up 25 percent over a year ago to $5.4 billion. Net income, excluding unusual charges, rose 72 percent to $342 million, or $4.76 per share.
"Mohawk today is in the strongest position in our company's history," Lorberbaum said. "We have substantially grown our profits and expect continued improvement next year. With our Pergo, Marazzi and Spano acquisitions, we are quickly moving to drive synergies, lower costs and increase top line growth."
Lorberbaum projected the company will earn from $1.66 to $1.75 per share in the fourth quarter, excluding any restructuring or acquisition costs.
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