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Mohawk Industries (MHK – Free Report) posted a quarterly profit of $ 3.29 per share, without Zacks' consensus estimate of $ 3.59 per share. This compares to a profit of $ 3.75 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents a profit surprise of -8.36%. A quarter of a month ago, it was anticipated that this flooring manufacturer would post a profit of $ 3.88 per share while it was making a profit of $ 3.51, which left a surprise of -9 , 54%.
In the last four quarters, the company has exceeded EPS consensus estimates only once.
Mohawk Industries, which belongs to the Zacks furniture textile sector, achieved a turnover of $ 2.55 billion for the quarter ended September 2018, or 2.62% less than the Zacks consensus index. That compares with revenues of $ 2.45 billion a year ago. The Company has not been able to exceed consensus revenue estimates in the last four quarters.
The sustainability of the immediate stock price movement based on recently published figures and future earnings forecasts will depend primarily on management's comments on the call for results.
Shares of Mohawk Industries have lost about 46.5% since the beginning of the year, compared to -0.7% for the S & P 500.
What's next for Mohawk Industries?
Although Mohawk Industries has underperformed the market since the beginning of the year, the question for investors is: what is the next step for the stock?
There is no simple answer to this key question, but the company's earnings outlook is a reliable measure to help investors. This includes not only the current consensus results for the coming quarters, but also how these forecasts have changed recently.
Empirical research shows a strong correlation between short-term stock movements and trends in revisions to earnings estimates. Investors can track these revisions themselves or rely on a proven scoring tool such as Zacks Rank, which has impressive experience controlling revisions to earnings power estimates.
Prior to the release of these results, the trend of the estimated revisions for Mohawk Industries was unfavorable. Although the magnitude and direction of the revisions may change after the release of the company's earnings report, the current status results in a Zacks # 4 ranking (sale) for the stock. Equities should therefore underperform the market in the near future. You can see the complete list of # 1 Zacks stock at the current rank (strong buy) here.
It will be interesting to see how the estimates for the coming quarters and the current fiscal year will change in the coming days. The consensus against the current EPS forecast is $ 3.50 for a business turnover of $ 2.55 billion for the next quarter and $ 13.65 for a business turnover of 10, 15 billion USD for the current fiscal year.
Investors should be aware that the outlook for the sector can also have a significant impact on the performance of the security. With regard to the Zacks industry ranking, Textile – Furnishings is currently in the lower 7% of the 250+ Zacks industries. Our research shows that the top 50% of industries ranked by Zacks perform better than the bottom 50% by a factor greater than 2 to 1.
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