Tempur-Pedic Q1 Profits Plunge 78% (TPX)
Tempur-Pedic International Inc. (NYSE: TPX) reported on Thursday that its fiscal first-quarter earnings plunged 78% as it took charges linked to the acquisition and integration of Sealy Corp.
However, the Company boosted its full-year earnings and revenue outlook. Tempur Pedic now expects earnings of $2.75 a share on revenue of about $2.5 billion compared to its earlier guidance for earnings of $2.55 a share on revenue of about $1.43 billion. The Company expects recent acquisition will bolster growth.
Tempur Pedic, which acquired Sealy Corp in March, aims to counter intensifying competition in the mattress industry. In an effort to increase market-share and lure customers, players focused on high-end bedding market are now resorting to new product launches and promotions.
For the quarter, Tempur Pedic reported net income of $12.5 million or 20 cents a share compared to a profit of $56.2 million or 86 cents a share, in the year-earlier quarter. Excluding onetime items such as acquisition related costs, non-GAAP or adjusted earnings came at 62 cents a share.
Revenue for the quarter edged up 1.5% to $390.1 million, including $46.7 million from its newly acquired business (Sealy Corp). Excluding Sealy’s impact on sales, revenue plunged 11% to $343.4 million.
Analysts’ consensus estimate was for earnings of 61 cents a share on revenue of $348.3 million. Earlier in January, the Company had forecasted sales to either remain flat or fall slightly compared to the preceding fiscal fourth quarter sales of $341 million.
Gross margin narrowed to 48.3% from 53.6% as input costs soared 13%.
While revenue from bedding items which include mattresses and foundations rose 1.5% to $338.6 million, it increased 1.6% to $51.5 million in other product categories.
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Post Written By: Ed Liston
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.
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