Calhoun, GA, February 10, 2017— Mohawk’s Q4 2016 revenue rose 9.2%, and its annual income for 2016 rose 11% to $8.96 billion.
For the quarter, Mohawk reported net earnings of $234 million, compared to earnings of $192 million in Q4 2015, a 22% increase; and for the year, net earnings were $930 million, compared to earnings of $615 million in 2015, a 51% increase.
Diluted earnings per share (EPS) for the quarter were $3.13, a 22% increase over Q4 2015’s $2.57, and for the year, diluted earnings per share were $12.48, compared to $8.31 in Q4 2015, a 50% increase
EBITDA increased to $1.7 billion for the year.
For the global ceramic segment, sales rose 5% for the quarter to $749 million from $712 in Q4 2015, and income rose 16% for the quarter to $102 million from $88 million in Q4 2015, and, for the year, global ceramic segment revenue rose 5% to $3.174 billion, from $3.013 billion in 2015, and income rose 15% to $478 million from $414 million in 2015.
For the Flooring North America segment, revenue rose 10% for the quarter to $970 million from $880 million in Q4 2015; income rose 18.6% to $140 million from $118 million in Q4 2015.
For the Flooring North America segment’s yearly performance, revenue rose 7% to $3.866 billion from $3.602 billion in 2015. Income rose to $505 million from $264 million in 2015, an increase of 91%.
In the Flooring Rest of the World Segment, revenue rose 14% for the quarter to $463 million from $406 million in Q4 2015, and income rose 42% to $71 million from $50 million in Q4 2015.
For the year, revenue rose 32% to $1.919 billion from $1.457 in 2015; income rose 64% to $333 million from $203 million in 2015.
Commenting on Mohawk Industries’ fourth quarter and full year performance, Jeffrey S. Lorberbaum, chairman and CEO, stated, “In the fourth quarter, our sales and earnings per share set records for the period. Our operating margin for the quarter rose to 14.0%, a 150 basis point improvement over the prior year and the highest fourth quarter result in the company’s history.” He also expressed his pleasure with the company’s annual performance, calling it “outstanding.”
In addition, Lorberbaum confirmed that Mohawk has entered into an agreement to buy an Italian tile firm, near its existing facilities. This is commonly believed to be EmilCeramica.
Of the North American flooring segment, he says, “During the quarter, our Flooring North America Segment’s sales increased 10% as reported or 8.5% on a constant day’s basis. Operating income grew 18.5% to a margin of 14.5% as reported, or 15% excluding restructuring, integration and other charges. Residential carpet sales improved despite decreased selling prices from channel mix and growth in polyester. Our price increase of 3 to 5% to cover rising costs is being implemented in the first quarter. We are introducing SmartStrand Silk Reserve, which elevates luxuriously soft carpet to an unprecedented level, and AirO, a patented recycled polyester technology that produces a unique, more elegant soft flooring product that is installed in half the time. During the period, our commercial business grew faster than residential as a result of our investments in products and sales last year. Our hard surface sales, including LVT, laminate, wood and vinyl, continued their dramatic expansion. Our LVT plant made significant improvements during the period, and we are installing another production line that will double our U.S. capacity by the end of this year. We are introducing SolidTech, a new rigid product, to complement our existing flexible LVT collections. Our premium laminate products with realistic visuals and proprietary water resistance continue to outperform the market. We are introducing more refined visuals and longer planks that replicate solid wood from our new engineered wood plant.”
According to analyst Stifel, EPS guidance for Q1 2017 is 2.64 to 2.73, which represents an 11% to 15% increase over Q1 2016. Stifel adds, “We should note however, that we have not yet modeled the announced Emilceramica acquisition, which could be approximately $0.15 per share additive to EPS in 2017 assuming three quarters of ownership.”