Shares of Mohawk Industries (NYSE:MHK) plunged in Thursday trading just hours after the flooring manufacturer reported a big earnings miss on Wednesday evening. As of 2:45 p.m. EDT, Mohawk shares are down a whopping 16%.
Expected to report earnings of $3.88 per share, Mohawk reported adjusted earnings of $3.51 -- and GAAP profits of only $2.62.
Q2 sales of $2.6 billion increased 5% year over year, meeting Wall Street analysts' forecast. Mohawk management said that its "adjusted" earnings, however, declined 6%. Meanwhile, actual GAAP profits fell off a cliff -- down 25% year over year.
Mohawk CEO Jeffrey Lorberbaum admitted that the "results fell short of our expectations," blaming "input inflation, higher transportation costs, a stronger dollar and a tight labor market" for the shortfall. He also complained about "changing product mix, timing of price increases, lower production units," and "start-up of new projects."
But he promised that management is "taking actions to improve the performance of our U.S. businesses." These include, among other things, "raising prices" and expanding into both new products and new markets to help goose sales. What Lorberbaum did not do, however, was introduce new guidance reassuring investors that things will be improving anytime soon.
As of today, Wall Street analysts still are predicting that Mohawk will earn $15.28 per share this year, but after this week's news, investors have to be wondering if Mohawk still has any chance of hitting that target.