Mohawk Gains — For a Moment
February 25, 2008-- Home Textiles Today,
Even as core sales slumped, floor coverings supplier Mohawk Industries recorded a big upswing in profit during fiscal 2007 — but much of the increase was the result of a one-time tax benefit as well as a U.S. Customs refund.
For the full year ended Dec. 31, 2007, net earnings of $706.8 million were 55.1% higher than the $455.8 million earned in 2006.
Sales were down 5% to $1.807 billion in the fourth quarter, and down 4% for the year, to $7.586 billion.
The company also managed to cut its debt by $534 million during 2007.
Mohawk chairman and ceo Jeffrey Lorberbaum credited his U.S. management team for having "handled the many challenges as the flooring market continued its decline." The outlook was for first-quarter earnings of $0.81 to $0.90, a range below Wall Street expectations.
In the first quarter, the company is expecting further declines in volume and higher material costs.
"We have reduced production in the plants in the first quarter due to lower consumer demand and both our customers and Mohawk not building inventories as we have in prior years. With the current industry conditions, we are reducing our infrastructure costs further and increasing prices, which will lag the rising costs," the company said.
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