It was a record third quarter for Mohawk Industries, as the world’s largest flooring manufacturer reported net earnings of $215 million and diluted earnings per share of $2.89.
Excluding restructuring and acquisition charges, Mohawk’s net earnings were $222 million, and diluted earnings per share were $2.98, a 22 percent increase over last year’s report in the same period.
The Calhoun, Ga.-based company rode strong domestic and foreign demand for ceramic and luxury vinyl products. At home, demand for ceramic flooring was strong and led Mohawk to invest further in new products, sales representatives and service centers and galleries.
Commenting on the third quarter report, Jeff Lorberbaum, chairman and CEO, said new residential construction in the U.S. continues to produce the strongest domestic demand for ceramic products.
“To satisfy increased demand in the U.S. market, we have begun importing ceramic tile from both our Russian and Bulgarian business, leveraging our global footprint to optimize our profitability” he said.
In the company’s Flooring North America segments, sales were up 8 percent over the third quarter of 2014.
“During the period, we increased our investments in sales personnel, merchandising and promotions in both carpet and hard surfaces categories to enhance our position in the marketplace,” said Lorberbaum.
Hard surface sales “are growing faster than carpet across all channels,” he said, with builder and commercial sectors expanding fastest.
Driving down costs and improving efficiencies in Mohawk’s carpet divisions, meanwhile, resulted in the shuttering and consolidation of two commercial carpet plants.
Globally, Mohawk saw sales increase 24 percent. Laminate sales were up in the third quarter, and new Mohawk offerings featuring water-resistant technology were well-received.
Global ceramic sales were up 2 percent.
In Europe, “our ceramic sales are outpacing the market,” said Lorberbaum.
Upgrades to Mohawk’s European ceramic manufacturing facilities allowed the company to produce new types of products, like three-dimensional wall tiles, hexagons and brick visuals, as well as new vinyl textures.
Lorberbaum said Mohawk is growing its hold on ceramics in Russia, despite economic troubles there.
He said Mohawk made strides in the third quarter to align its acquisitions of IVC Group (purchased in January) and KAI Group (purchased in April), both European flooring manufacturers, of luxury vinyl and ceramic products, respectively.
“Looking to the fourth quarter,” said Lorberbaum, “we anticipate that the U.S. economy will continue its gradual growth. we expect year-over-year margin growth to continue in all segments as a result of our strategies and acquisitions.”
Fourth quarter earnings will feel the impact of new plant start-ups, the interruption of a Mohawk board production facility and four fewer days, he said. But the company still expects to gain $2.66 to $2.75 per share.
Mohawk stock closed the day Thursday at $197.46 a share.
Contact staff writer Alex Green at agreen@timesfreepress.com or 423-757-6480.