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Mohawk Industries (MHK) Tops Q3 Earnings on Higher Sales
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Mohawk Industries, Inc.’s (MHK - Free Report) adjusted earnings per share (EPS) of $3.75 beat the Zacks Consensus Estimate of $3.74 by 0.3%. Earnings also increased 7% year over year on higher sales and improved productivity.
Total revenues of $2.4 billion missed the Zacks Consensus Estimate of $2.5 billion by 0.6%. Revenues, however, increased 7% year over year on higher sales across all segments. Also, the company’s international business contributed significantly to its revenue growth, as the economies of those countries expanded. These positives have offset the adverse impact of higher material costs, disruptions from hurricanes and reduced patent revenue.
Operating Highlights
Adjusted gross profit of $795.7 million increased 6.9% year over year. Adjusted operating income rose 8.4% to $397.5 million.
Adjusted selling, general and administrative (SG&A) expenses increased 5.6% to $398.2 million from the prior-year quarter.
Segment Details
Global Ceramic: Net sales at this segment amounted to $893.4 million, increasing 9% year over year on a reported and 7% on the basis of constant days and constant currency. Solid contributions from its ceramic business in Russia and Mexico as well as acquisitions in Italy and Poland contributed to the upside.
Flooring North America: Net sales at this segment totaled $1.03 billion, up 2% year over year on strong price, mix and productivity improvement that offset the increases in raw materials and other inflation.
Flooring Rest of the World: Net sales increased 13% year over year to $523.3 million. On a constant days and currency basis, sales improved 8% due to broader use of its patents and solid sales of LVT products.
Q4 Guidance
Mohawk expects earnings in the fourth quarter to be in the range of $3.25-$3.34 per share.
The company expects the business to benefit in the quarter from innovative new products, higher volume and synergies of recent acquisitions. Mohawk expects to absorb more start-up costs, estimated at $15 million, in its quarterly results with the commencement of new operations. Meanwhile, the disruptions caused by hurricanes in the U.S. are expected to recover. Overall, greater productivity, better product mix and price changes are likely to boost fourth quarter results, partially offsetting the reductions from expired patents.
Activision sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for current-year earnings moved north by 0.5% over the last seven days.
Interface, a Zacks Rank #2 (Buy) stock, is likely to witness 10% earnings growth in 2017.
Electronic Arts, also a Zacks Rank #2 stock, is expected to see 23.2% growth in the current-year earnings.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
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Mohawk Industries (MHK) Tops Q3 Earnings on Higher Sales
Mohawk Industries, Inc.’s (MHK - Free Report) adjusted earnings per share (EPS) of $3.75 beat the Zacks Consensus Estimate of $3.74 by 0.3%. Earnings also increased 7% year over year on higher sales and improved productivity.
Total revenues of $2.4 billion missed the Zacks Consensus Estimate of $2.5 billion by 0.6%. Revenues, however, increased 7% year over year on higher sales across all segments. Also, the company’s international business contributed significantly to its revenue growth, as the economies of those countries expanded. These positives have offset the adverse impact of higher material costs, disruptions from hurricanes and reduced patent revenue.
Operating Highlights
Adjusted gross profit of $795.7 million increased 6.9% year over year. Adjusted operating income rose 8.4% to $397.5 million.
Adjusted selling, general and administrative (SG&A) expenses increased 5.6% to $398.2 million from the prior-year quarter.
Segment Details
Global Ceramic: Net sales at this segment amounted to $893.4 million, increasing 9% year over year on a reported and 7% on the basis of constant days and constant currency. Solid contributions from its ceramic business in Russia and Mexico as well as acquisitions in Italy and Poland contributed to the upside.
Flooring North America: Net sales at this segment totaled $1.03 billion, up 2% year over year on strong price, mix and productivity improvement that offset the increases in raw materials and other inflation.
Flooring Rest of the World: Net sales increased 13% year over year to $523.3 million. On a constant days and currency basis, sales improved 8% due to broader use of its patents and solid sales of LVT products.
Q4 Guidance
Mohawk expects earnings in the fourth quarter to be in the range of $3.25-$3.34 per share.
The company expects the business to benefit in the quarter from innovative new products, higher volume and synergies of recent acquisitions. Mohawk expects to absorb more start-up costs, estimated at $15 million, in its quarterly results with the commencement of new operations. Meanwhile, the disruptions caused by hurricanes in the U.S. are expected to recover. Overall, greater productivity, better product mix and price changes are likely to boost fourth quarter results, partially offsetting the reductions from expired patents.
Zacks Rank
Mohawk Industries carries a Zacks Rank 3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Other Stocks to Consider
Other top-ranked stocks in the Consumer Discretionary sector that deserve a look include Activision Blizzard, Inc. , Interface, Inc. (TILE - Free Report) and Electronic Arts Inc. (EA - Free Report) .
Activision sports a Zacks Rank #1 (Strong Buy). The Zacks Consensus Estimate for current-year earnings moved north by 0.5% over the last seven days.
Interface, a Zacks Rank #2 (Buy) stock, is likely to witness 10% earnings growth in 2017.
Electronic Arts, also a Zacks Rank #2 stock, is expected to see 23.2% growth in the current-year earnings.
Wall Street’s Next Amazon
Zacks EVP Kevin Matras believes this familiar stock has only just begun its climb to become one of the greatest investments of all time. It’s a once-in-a-generation opportunity to invest in pure genius.
Click for details >>