What Happened:

Shares of flooring manufacturer Mohawk Industries (NYSE:MHK) jumped 19% in the afternoon session after the company reported second quarter earnings results. Both adjusted EBITDA and EPS beat in the quarter, showing that profitability is strong. Mohawk Industries provided an optimistic earnings forecast for the next quarter, which exceeded analysts' expectations. Despite a challenging market environment driven by higher interest rates and consumers' deferral of home remodeling and improvement projects, the market seems to be cheering the company's restructuring actions. "To reduce costs and align our business with current conditions, we are initiating additional restructuring actions that will generate annualized savings of $100 million, of which $20-$25 million will be recognized this year. The cash cost of these actions is about $40 million, with a total cost of approximately $130 million." Overall, this was a really good quarter that should please shareholders.

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What is the market telling us:

Mohawk Industries's shares are quite volatile and over the last year have had 11 moves greater than 5%. But moves this big are very rare even for Mohawk Industries and that is indicating to us that this news had a significant impact on the market's perception of the business.

The biggest move we wrote about over the last year was 6 months ago, when the company gained 6% on the news that Deutsche Bank upgraded the stock's rating from Hold to Buy and raised the price target from $98 to $152. The new price target represents a potential 30% upside from where shares traded when the upgrade was announced.

Mohawk Industries is up 50.3% since the beginning of the year, and at $157.89 per share, has set a new 52-week high. Investors who bought $1,000 worth of Mohawk Industries's shares 5 years ago would now be looking at an investment worth $1,228.

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