The Dixie Group, a carpet and flooring manufacturer based in Chattanooga, announced Thursday that third-quarter earnings are likely to be below analysts’ expectations because of a “difficult economic environment.”

Earnings during the quarter that ended Sept. 27, were adversely affected by continuing weakness in the sales of new and existing homes as well as deteriorating credit conditions, the company said in a statement Thursday.

“We are disappointed that residential carpet markets have continued to weaken and commercial carpet sales have declined faster than anticipated,” Dan K. Frierson, chairman and chief executive officer, said in a prepared statement. “As a result, we expect to report a loss from continuing operations for the third quarter, which will result in earnings well below current analyst estimates.”

The company developed several cost-reduction initiatives for the fourth quarter that officials hope will better utilize its facilities and reduce costs.

During the second quarter, Dixie’s income from continuing operations was $1.3 million or 10 cents per diluted share compared to $2.6 million or 19 cents per diluted share for the same time in 2007.

The company plans to merge tufting operations in Eton, Ga., into its tufting and dying facility in Atmore, Ala.

Comments