Mohawk Industries Shares Rise As Q2 Results Beat Estimates, Outlook Above View

(RTTNews) - Shares of Mohawk Industries Inc. (MHK) gained more than 8 percent in extended trades Thursday after the floor covering products maker reported results for the second quarter that beat analysts' estimates and also forecast third-quarter earnings above Street expectations. The company's profit for the second quarter rose 16 percent on higher sales across all its three segments.

Jeffrey Lorberbaum, Chairman and CEO of Mohawk Industries, said, "Mohawk, the world's largest flooring manufacturer, today reported our most successful second quarter on record with strong revenue and profit growth, as both our legacy business and recent acquisitions delivered solid performances that exceeded our expectations. For the quarter, our legacy net sales increased 6% as reported, with the balance of our growth stemming from our recent acquisitions of Pergo, Marazzi and Spano."

Carpet segment net sales for the quarter rose 5 percent from the year-ago period to $770.87 million, rising to their highest levels in more than four years due to improvements in residential new construction and remodeling as well as continued strength in the commercial sector.

Ceramic segment net sales surged 88 percent to $760.17 million, with strong growth in the legacy Dal-Tile business as well as the Marazzi acquisition.

Laminate and wood segment net sales grew 33 percent to $470.98 million, primarily due to the company's acquisitions of Pergo and Spano with stronger sales in legacy North America offsetting the company's slower legacy European business.

Calhoun, Georgia-based Mohawk's second-quarter net earnings were $84.57 million or $1.16 per share, up from $73.19 million or $1.06 per share in the same period last year. The latest quarter's results include loss from discontinued operations of $1.36 million or $0.02 per share.

Adjusted earnings for the quarter were $133.81 million or $1.84 per share, compared to $79.21 million or $1.14 per share in the prior-year quarter. On average, 13 analysts polled by Thomson Reuters expected the company to earn $1.66 per share for the quarter.

Net sales for the quarter rose 35 percent to $1.98 billion from $1.47 billion in the year-ago period. Analysts had a consensus revenue estimate of $1.96 billion.

Looking ahead to the third quarter, Mohawk forecast earnings in a range of $1.81 to $1.91 per share excluding any restructuring or acquisition costs. Analysts currently expect third-quarter earnings of $1.68 per share.

The company said that with business improvement and acquisitions in 2013, it anticipates the fourth quarter seasonality impact to be slightly more than 2010 and 2011.

Lorberbaum added, "We are increasingly confident in the continued strengthening of the U.S. market, and we believe that continued job growth, expanded new home construction and greater remodeling investments along with our new acquisitions will improve our future results."

MHK closed Thursday's regular trading session at $121.29, up $2.30 or 1.93 percent on a volume of 1.11 million shares. In after-hours, the stock further gained $10.20 or 8.41 percent to $131.49.