Tempur-Pedic Rises as Profit Tops Analysts’ Estimates
Tempur-Pedic International Inc. (TPX), the mattress maker that agreed to acquire rival Sealy Corp. (ZZ) in September, advanced after fourth-quarter profit topped estimates and sales declined less than predicted.
Tempur-Pedic gained 6.4 percent to $40.79 at the close in New York. The stock had fallen 40 percent last year, while the Standard & Poor’s Midcap Consumer Discretionary Sector Index advanced 22 percent.
Tempur-Pedic International, which is trying to reinvigorate sales amid increasing competition, agreed to buy KKR & Co.- backed Sealy for about $229 million. The companies are currently cooperating with the Federal Trade Commission’s antitrust review of the transaction and expect to complete the deal in the first half of 2013.
“We remain very confident in our company’s growth potential and our strong brand, and are very excited about our proposed combination with Sealy,” Mark Sarvary, chief executive officer of the Lexington, Kentucky-based company, said in a statement yesterday.
Fourth-quarter profit excluding some items was 60 cents a share. That topped the average analyst estimate of 55 cents, according to data compiled by Bloomberg. Net sales dropped 7 percent to $341.1 million. Analysts had projected $338.9 million. The company forecast annual adjusted profit of $2.55 a share on sales of $1.425 billion. Analysts had estimated earnings of $2.72 and revenue of $1.427 billion.
Sealy, which reported fourth-quarter results Jan. 23, recorded adjusted profit of 4 cents a share, compared with a 3- cent loss predicted by analysts. The shares gained 0.5 percent to $2.17 at the close.
Select Comfort Corp. (SCSS), another mattress maker that reported earnings yesterday, today tumbled 18 percent to $23.16 after quarterly profit missed estimates.
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