The world’s biggest floorcovering maker beat analysts expectations for first quarter earnings despite a weakening in sales and a strong U.S. dollar around the globe.
Mohawk Industries said today its adjusted earnings totaled $154 million, or $2.13 per share, which was 7 cents per share better than the average forecast among analysts who follow the company.
Mohawk’s net income, adjusted for restructuring and acquisition expenses, was still down nearly 30 percent from a year ago when Mohawk’s adjusted earnings totaled $255 million, or $3.01 per share.
Mohawk sales in the first three months of the year totaled $2.441 billion, up 1 percent from a year ago.
“In the first quarter, we delivered results in-line with the high end of our expectations despite economies weakening in most regions and a stronger U.S. dollar, reducing our translated results,” said Jeff Lorberbaum, chief executive of the Calhoun, Georgia-based floorcovering firm. “Around the world, uneven demand impacted volume, increasing pressure on both price and mix. We reduced our production rates to balance our inventories with our customers’ demand and manage our working capital.”
Lorberbaum said U.S. housing markets “are showing signs of improvement as we enter the second quarter…and we remain optimistic about our ability to improve their market positions and costs.” The Mohawk CEO said the company is introducing new products to differentiate its offering and enhance margins and Mohawk has raised prices to offset higher energy and material costs.
Lorberbaum said Mohawk’s recent acquisitions “are positively impacting our results as we integrate them into the business,” helping lead the company to expect better results in the second quarter.
Mohawk projects its second quarter earnings will likely be $2.81 to $2.91 per share.
“We are taking the necessary steps to adapt to present conditions and deliver greater profitability for the long term,” Lorberbaum said.
Ahead of today’s earnings announcement, Mohawk shares fell by nearly 2.6 percent, or $3.45 per share, to close at $130.71.
Mohawk’s stock price is up nearly 11.8 percent so far this year, but Mohawk shares are still trading at 42.5 percent below where they did 12 months ago.