Mohawk Q1 Earnings Higher Than Expected

Calhoun, GA, April 29, 2010--Mohawk Industries reported higher than expected earnings for the first quarter.

Mohawk posted net income of $21 million or $0.30 a share, compared with a net loss of $106 million or $1.55 per share in the first quarter of 2009.

First-quarter sales rose 2% to $1.35 billion.

"Our earnings were higher than expected as the economic cycle has bottomed and we had more favorable cost reductions and foreign exchange," said CEO Jeffrey Lorberbaum.

"Our first quarter sales were flat compared to the fourth quarter due to an improving residential business. During the first quarter, we have introduced innovative new products, enhanced manufacturing and distribution processes, reduced the cost structure and improved quality and productivity throughout the business.

The company said its 4-6% carpet price increase announced in December will be fully implemented in the second quarter. Mohawk also recently announced an additional carpet price increase of 5-7% to recover the change in material costs.

Dal-Tile sales were down 5% in the quarter due to the impact of new home construction and the commercial market in the ceramic business. Mohawk said its market share remains strong and is about five times larger than its nearest competitor.

Unilin sales improved 14% as reported or 9% on a constant exchange rate.

Mohawk said it expects the residential category to improve this year while the commercial business is expected to remain difficult.

"We are well positioned to take advantage of the economic recovery which is just beginning," the earnings release said.

Related Topics:Daltile, Mohawk Industries