Mohawk Industries' boasted a record-setting quarter as the world's largest flooring company reported its highest-ever earnings per share, when adjusted for unusual charges.
Profits for the Calhoun, Ga.-based floorcovering giant jumped 20 percent in the second quarter to $162 million, excluding unusual charges, or $2.21 per share, up from $134 million, or $1.84 per share, in the second quarter of 2013.
Mohawk anticipates earnings to rise higher in the third quarter, somewhere between $2.38 and $2.47 per share, as it cuts costs and increases profitability at its far flung operations in Australia, Brazil, Canada, China, Europe, India, Malaysia, Mexico, Russia and the U.S.
Though sales increased less than anticipated due to slower-than-expected improvement in the U.S. housing market, the company made a series of business moves to squeeze every penny possible out of the quarter, said Jeff Lorberbaum, chairman and CEO.
"Our adjusted operating income increased 160 basis points as productivity initiatives, cost reductions, price increases and manufacturing consolidation drove higher earnings across the business," Lorberbaum said. "Top line growth was less than we anticipated due to slower improvement in U.S. housing and remodeling; however, profits were in line with expectations as a result of successful product introductions, productivity improvements and better cost controls."
The flooring manufacturer sold $2.05 billion in flooring products, a 4 percent increase in sales from the second quarter, giving the company a running total of $3.9 billion in sales for the first six months of the fiscal year -- an increase of 12 percent.
For the full year, Mohawk expects to earn between $8.09 and $8.25 per share, excluding restructuring charges.
"We are continuing to invest in our acquisitions to improve profitability, increase mix and streamline the business; and we anticipate that these actions will result in even higher earnings as the European and Russian economies improve," Lorberbaum said.
Carpet sales were up just 1 percent during the quarter to $780 million over the second quarter of 2013, though the company was able to squeeze a 15 percent increase in operating income out of the segment through a number of cost saving measures, including a price increase.
The company's ceramic tile segment sales soared to $797 million, up 5 percent over the same quarter of 2013, with operating income increasing 21 percent. The company's hard surfaces are gaining in popularity compared to carpet.
Laminate and wood surfaces chalked up $501 million in sales, up 6 percent year over year. The company increased its adjusted operating income for the segment by 21 percent, bolstered in part by increasd use of wood floors in new construction housing and price increases.
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