Mohawk Ind. 2Q sales flat but earnings jump 48%
August 10, 2010-- Home Textiles Today,
Calhoun, Ga. - Mohawk Industries Inc. delivered a 48% earnings jolt during its second quarter, generating a $68 million profit and its highest operating margin in two years, the company reported late last week.
Earnings per share (EPS) for the quarter ended July 3 were 99 cents, which included non-recurring tax benefits, charges for redemption premiums on bonds and restructuring activities. Excluding those unusual, net earnings and EPS would have been $53 million and 77 cents per share, the company said.
Operating margin improved by 6.4%, or 6.8% adjusted.
Sales in the Mohawk segment fell 3%, but parent Mohawk Industries Inc. experienced flat year-over-year net sales of $1.4 billion.
"Profitability has improved as price increases, product mix, productivity improvements and cost reductions resulted in higher margins" in the Mohawk segment, the company said. Residential product introductions shipped earlier this year and should improve the segment's volume in the second half of the year.
"Our commercial team's selling efforts are focused on the government, healthcare and education markets. Our focus continues on improving quality, product management, service and costs. Our second price increase this year of 5% to 7%, announced in April, is being implemented to offset higher cost raw material," Mohawk added.
Chairman and ceo Jeffrey Lorberbaum said Mohawk's earnings were better than anticipated due to higher sales in the company's laminate flooring division, Unilin, as well as an improving product mix in Mohawk, price increases and cost reduction programs.
Mohawk Industries' year-to-date net earnings were $89 million, or $1.29 per share, compared to a net loss of in the first six months of 2009 of $60 million, 87 cents per share. Excluding the unusual items from second quarter, net earnings would have been $77 million and EPS would have been $1.12.
Sales for the first six months rose 5% to $2.7 billion.
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