In the 2002 fourth quarter earnings release, the company indicated concern about weakening conditions in its markets, as well as lower soft surface plant utilization and unabsorbed overhead costs in the company's first quarter.
In addition, lower sales volume of about 5 percent and more aggressive product promotions have impacted operating margins. The Dal-Tile segment sales improved approximately 5 percent on a comparable basis.
As a result, Mohawk has revised its first quarter earnings forecast to $0.60 to $0.63 diluted earnings per share.
Mohawk is implementing a price increase of 5 to 8 percent in carpet at the end of March 2003.
The company is also reducing direct labor costs, selling, general and administrative expenses, as well as lowering capital expenditures. The company forecasts second quarter earnings in a range from $1.05 to $1.15 diluted earnings per share.