Mohawk Industries posts 3Q loss, weak 4Q outlook

For the three months ended in September, Mohawk recorded a loss of $1.39 billion, or $20.37 per share, compared with a profit of $122.1 million, or $1.78 per share, in the year-earlier quarter.

Excluding a $1.2 billion non-cash impairment charge for goodwill and intangibles plus a $253 million deferred tax asset impairment, the company earned $1.10 per share. None of the charges affect Mohawk's operations, liquidity or debt covenants, the Calhoun, Ga.-based company said.

Analysts polled by Thomson Reuters expected a profit of $1.12 per share. Analyst expectations typically exclude one-time items.

Mohawk's sales fell 9 percent to $1.76 billion from $1.94 billion. Wall Street expected $1.78 billion in revenue.

For the fourth quarter, Mohawk forecast per-share earnings of 20 cents to 30 cents, excluding an estimated fourth-quarter restructuring charge of $25 million to $30 million. Analysts expect a profit of $1.04 per share.

Mohawk cited a stronger dollar, the slowing economy, tightening credit and falling consumption of consumers and businesses.

"We do not expect to benefit significantly from declining oil and energy until the first half of 2009," Mohawk said in a statement. "In the (fourth) quarter, our businesses will reduce inventory with increased shut-downs and be impacted by a decline in product mix. The stronger dollar is expected to negatively impact our results in the period."

Cowen analyst Laura Champine slashed her fourth-quarter per-share earnings estimate to 26 cents from $1.57 "to account for the hideous" outlook.

"Earnings growth remains under significant pressure from weak demand and higher costs," she said in a note. "Mohawk now faces a currency headwind in the laminate segment related to the euro."