Mohawk up 11 percent in quarter
The world’s biggest floorcovering manufacturer expects to roll out another year of higher profits with improved carpet and hardwood flooring sales and lower taxes in 2018.
Mohawk Industries Inc. said Thursday its adjusted first quarter earnings were up 11 percent over a year ago and Mohawk CEO Jeff Lorberbaum said he expects profits in the current quarter will be up from 5 to 7 percent from last year.
In the first three months of 2018, Mohawk earned adjusted net income of $225 million, or $3.01 per share, on sales of $2.4 billion. In the same period a year ago, Mohawk earned $201 million, or $2.68 per share, on sales of $2.2 billion.
“Mohawk is benefiting from its diverse geographical footprint and product portfolio,” Lorberbaum said. “Our performance in the first quarter accentuated this strength as we realized significant growth in LVT (luxury vinyl tile) in our largest markets and sales and profits grew strongly in our ceramic business outside the U.S.”
Mohawk earnings are being squeezed this year by the higher startup costs of new facilities, the loss of income from expired patents and higher material and freight costs. But the company’s effective tax rate is falling from 26 percent to 21 percent and the company is both increasing sales and prices for many of its products.
“We are initiating selective pricing actions by product and region that, combined with improving mix and cost reductions, will offset expected inflation,” Lorberbaum said.