Floor covering products company Mohawk Industries, Inc. (MHK), Thursday reported a swing to profit in the fourth quarter on cost savings efforts, personnel reductions and plant consolidations. Quarterly results also reflect the absence of a substantial charge recorded in the year-ago quarter. Looking ahead, the company provided its forecast for the first quarter, with earnings indicated to come in above current Street estimates.
Net earnings of Calhoun, Georgia-based Mohawk for the fourth quarter was $19.78 million or $0.29 per share, compared to a loss of $127.62 million or $1.87 per share in the same quarter a year ago.
On average, 11 analysts polled by Thomson Reuters expected earnings of $0.34 per share for the quarter. Analysts' estimate typically excludes one-time items.
Quarterly results included a restructuring charge of approximately $30 million primarily related to distribution and manufacturing infrastructure. Excluding charge, net earnings would have been $39 million and $0.56 per share.
Excluding the 2008 fourth quarter goodwill, intangible and restructuring charges of $124.49 million, net loss would have been $5.1 million and $0.08 per share.
Mohawk's net sales decreased 9% to $1.35 billion from $1.49 billion in the prior year quarter, however, beat Street estimates of $1.28 billion.
Sales decrease in the U.S. and Europe was primarily attributable to continuing weak consumer discretionary spending, low home sales and soft business investment.
Operating income was $46.87 million, compared to operating loss of $93.42 million in the year-earlier quarter.
Mohawk segment sales were down 8% for the quarter, better than the industry. Dal-Tile sales were down 20% as reported or 21% with a constant exchange rate. Unilin sales increased 2% for the quarter as reported and decreased 7% on a constant exchange rate.
The company also indicated implementing a price increase in the first quarter of 2010 to recover raw material cost inflation.
For full year 2009, Mohawk's net loss was $5.50 million or $0.08 per share, compared to a loss of $1.46 billion or $21.32 per share a year ago. Net sales for the year were $5.34 billion, down 22% from $6.83 billion in the prior year.
Street analysts expected earnings of $1.31 per share on revenues of $5.33 billion for the year.
Looking ahead, Mohawk said it expects first quarter earnings in the range of $0.10-$0.20 per share excluding restructuring charges. The Street currently expects earnings of $0.13 per share for the quarter.
MHK closed Thursday's regular trading at $47.78, up $0.44 or 0.93%, on a volume of 0.90 million shares. In after-hours, the stock further gained $0.22 or 0.46%, to trade at $48.00.
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