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A Look at Mohawk Industries’s 3Q16 Earnings

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Nov. 9 2016, Updated 11:05 a.m. ET

Price movement

Mohawk Industries (MHK) has a market cap of $14.3 billion. It rose 7.8% to close at $190.75 per share on November 4, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 3.3%, -5.0%, and 0.72%, respectively, on the same day.

MHK is trading 0.01% above its 20-day moving average, 4.7% below its 50-day moving average, and 1.1% below its 200-day moving average.

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Related ETF and peers

The Vanguard Large-Cap ETF (VV) invests 0.06% of its holdings in Mohawk Industries. The ETF tracks a market cap–weighted index that covers 85% of the market capitalization of the US equity market. The YTD price movement of VV was 3.7% on November 4.

The market caps of Mohawk Industries’s competitors are as follows:

  • Armstrong World Industries (AWI) — $2.0 billion
  • James Hardie Industries -ADR (JHX) — $6.4 billion
  • Berkshire Hathaway (BRK.A) — $351.9 billion

Performance of Mohawk Industries in fiscal 3Q16

Mohawk Industries reported fiscal 3Q16 net sales of ~$2.3 billion, a rise of 6.5% compared to net sales of ~$2.2 billion in fiscal 3Q15. Sales from Global Ceramic, Flooring North America, and Flooring Rest of the World segments rose 3.9%, 5.6%, and 14.7%, respectively, in fiscal 3Q16 compared to fiscal 3Q15.

The company’s gross profit margin and operating margin rose 90 basis points and 310 basis points, respectively, in fiscal 3Q16 compared to fiscal 3Q15.

Its net income and EPS (earnings per share) rose to $269.9 million and $3.62, respectively, in fiscal 3Q16 compared to $214.9 million and $2.89, respectively, in fiscal 3Q15. It reported adjusted EPS of $3.50 in fiscal 3Q16, a rise of 17.5% compared to fiscal 3Q15.

Mohawk’s cash and cash equivalents and inventories rose 1.3% and 3.2%, respectively, in fiscal 3Q16 compared to fiscal 3Q15. Its current ratio rose to 1.2x, and its debt-to-equity ratio fell to 0.83x in fiscal 3Q16 compared to a current ratio and a debt-to-equity ratio of 1.0x and 1.1x, respectively, in fiscal 3Q15.

The company has projected the EPS in the range of $3.16–$3.25 per share, which excludes any restructuring charges, for fiscal 4Q16.

In the final part of this series, we’ll discuss GoPro (GPRO).

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