Mohawk Earnings Better Than Company Expected

Calhoun, GA, July 30, 2009--Mohawk Industries Inc. reported second quarter net earnings of $46 million and earnings per share of $0.67.

Operating income for the second quarter was $75 million. A restructuring charge of $12 million was recorded in the quarter primarily due to the closure of a European laminate facility.

In the second quarter of 2008, net earnings and earnings per share were $89 million and $1.29, respectively.

Net sales for the quarter were $1.4 billion, a decrease of 24% from 2008.

For the first six months of 2009, Mohawk had a net loss of $60 $0.87 per share.

Net sales for the first six months  were $2.61 billion, a 27% decrease from 2008. Sales declined 22% based on a constant exchange rate.

"Our second quarter earnings surpassed our expectations," said CEO Jeffrey Lorberbaum.

"Our results improved from the first quarter as we benefited from increased sales, lower costs and higher utilization rates. We are transitioning to a leaner, lower cost structure to emerge in a stronger position when the economy recovers."

The Mohawk segment sales were down 21% with the residential decline beginning to stabilize but commercial is expected to continue its contraction, the company said.

Mohawk said pressures remain in the commodity categories and product mix has been declining as customers trade down to reduce project costs.

Dal-Tile sales were down 22% or 21% using a constant exchange rate. Dal-Tile has been impacted greater by the present contraction of the commercial business.

Unilin sales declined 32% or 24% on a constant exchange rate basis.  Laminate sales have declined with residential remodeling and home sales.

The firm said that U.S. residential appears to be stabilizing at a low level with signs of improving home sales which are supported by low mortgage rates but the commercial decline continues and it is adjusting  business to the demand levels.

Related Topics:Daltile, Mohawk Industries