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Mohawk (MHK) to Report Q1 Earnings: What's in the Offing?

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Mohawk Industries, Inc. (MHK - Free Report) is scheduled to report first-quarter 2021 results on Apr 29, after market close.

In the last reported quarter, the company’s adjusted earnings and net sales topped the Zacks Consensus Estimate by 22.9% and 5.6%, respectively. Also, on a year-over-year basis, the metrics improved 57.3% and 9%, respectively.

Trend in Estimate Revision

The Zacks Consensus Estimate for Mohawk’s first-quarter earnings is pegged at $2.80 per share, indicating a 68.7% increase from the prior-year reported figure of $1.66. The consensus estimate for net sales is pegged at $2.60 billion, suggesting a 13.8% increase from the year-ago reported figure.

Mohawk Industries, Inc. Price and EPS Surprise

Mohawk Industries, Inc. Price and EPS Surprise

Mohawk Industries, Inc. price-eps-surprise | Mohawk Industries, Inc. Quote

Factors to Note

The company is expected to have registered improved sales and strong order backlog across the enterprise during the first quarter. Continued government stimulus, low interest rates, new home construction and residential remodeling are likely to have benefitted the company in to-be-reported quarter, as highlighted during the fourth-quarter 2020 earnings call.

Owing to solid momentum in the residential market, Mohawk's U.S. ceramic business has been witnessing improved customer traffic due to higher home sales and remodeling activity.

The Global Ceramic unit was backed by strong growth in the residential channel from heightened remodeling and home sales. The consensus mark for revenues from the Global Ceramic unit is pegged at $951 million, implying a 12.1% year-over-year increase.

The Flooring NA business has also been seeing strong growth in the residential channel. However, its commercial channel got impacted by lower business investments. The consensus estimate for the Flooring NA segment’s net sales is pegged at $909 million, indicating an improvement of 7.2% from the year-ago reported figure.

Within Flooring ROW, the company has been witnessing strong demand in most categories and geographies. Especially, the insulation business has been experiencing strong demand backed by government incentives for energy savings, which are likely to positively impact first-quarter results. The consensus mark for revenues from Flooring ROW is pegged at $734 million, suggesting a 24.6% improvement from the year-ago quarter.

However, Mohawk has been witnessing inflation in most of the product categories and hence, raising prices. Also, it has been experiencing rise in material, labor and transportation costs. Nonetheless, selective price increase and cost-saving initiatives might have offset the increased cost to some extent.

Coming to bottom-line projections, the consensus mark for adjusted operating income from Global Ceramic and Flooring NA units indicates a 94% and 48.5% rise on a year-over-year basis, respectively. Nonetheless, the same from the Flooring ROW business suggests 53.1% year-over-year growth.

During the fourth-quarter 2020 earnings call, management expected first-quarter adjusted earnings (excluding restructuring charges) in the range of $2.69-$2.79 per share, indicating 62-68.1% improvement from the year-ago reported figure of $1.66.

What the Zacks Model Unveils

Our proven model does not conclusively predict an earnings beat for Mohawk this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Currently, it has a Zacks Rank #3 and an Earnings ESP of -1.53%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Worth a Look

Here are some companies in the Zacks Construction sector, which according to our model have the right combination of elements to post an earnings beat in their respective quarters to be reported.

Mattel, Inc. (MAT - Free Report) has an Earnings ESP of +27.08% and holds a Zacks Rank #2.

Boyd Gaming Corporation (BYD - Free Report) has an Earnings ESP of +7.42% and a Zacks Rank #3.

World Wrestling Entertainment, Inc. (WWE - Free Report) has an Earnings ESP of +8.62% and a Zacks Rank #1.

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