Mohawk Industries 2Q profit drops 23 percent

The flooring company reported net income of $88.8 million, or $1.29 per share, for the quarter, down from $115.3 million, or $1.68 per share, for the same quarter of the previous year.

The company's quarterly revenue dropped 7 percent to $1.84 billion.

The results topped Wall Street and the company's expectations. Analysts polled by Thomson Financial expected net income of $1.27 for the quarter. Mohawk had previously said it expected earnings between $1.23 and $1.26 for the quarter

Mohawk Chairman and Chief Executive Jeffery Lorberbaum said in a statement that the weak U.S. housing market and slowing economies in the U.S. and Europe contributed to the decline. He also noted that higher material and energy costs were significant factors.

While Mohawk officials said the company has taken many steps to cope with the challenges--such as raising prices and reducing internal costs--the same market issues will continue through the third quarter.

The company set its earnings-per-share guidance at $1.06 to $1.15 for the third quarter, versus the average analyst estimate of $1.40 per share.

Shares of Mohawk Industries fell $2.26, or 3.5 percent, to $61.80 in aftermarket trading.