What do you think of this pop in MHK in light of the lower housing starts?
Associated Press
Mohawk Industries Peaks on 4Q Profit
Associated Press 02.16.07, 10:54 AM ET
Shares of Mohawk Industries Inc. jumped to a new annual high Friday morning after the carpet and flooring maker said its fourth-quarter profit increased in spite of slower housing industry growth.
Calhoun, Ga.-based Mohawk said it earned $129.5 million, or $1.90 per share, for the quarter, 30 percent better than $99.6 million, or $1.47 per share, a year earlier. The profit surpassed Wall Street expectations of $1.52 per share. The company's first-quarter forecast, however, was lower than analysts anticipated.
Raymond James & Associates analyst Sam Darkatsch said the company's Unilin division did better than expected due to higher sales, which he did not expect to continue. While sales in the Mohawk division were weak, its profit margin was high.
"We believe the increasingly promotional U.S. flooring industry has yet to bottom, as floors are installed six to 12 months following a housing start, suggesting the steep downturn for Mohawk's results has only now begun," Darkatsch said.
The company forecast $1.01 per share to $1.10 in profit. Including a $5 million U.S. customs refund, he said the company expects about $1 per share.
Mohawk shares climbed as high as $91.86 in morning trading, and later edged down to $90.42, a gain of $5.79, or 6.9 percent, on the New York Stock Exchange. |
