Tempur Pedic International Earnings: Here’s Why the Stock is Sky High

Tempur Pedic International Inc. (NYSE:TPX) delivered a profit and beat Wall Street’s expectations, AND beat the revenue expectation. The revenue beat is a positive sign to shareholders seeking high growth out of the company. Shares are up 13%.

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Tempur Pedic International Inc. Earnings Cheat Sheet

Results: Net income decreased -58.27% to $23.5 million (60 cents per diluted share) in the quarter versus a net gain of $56.32 million in the year-earlier quarter.

Revenue: Decreased 7.01% to $341.1 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Tempur Pedic International Inc. reported adjusted net income of 60 cents per share. By that measure, the company beat the mean analyst estimate of $0.55. It beat the average revenue estimate of $339.04 million.

Quoting Management: Chief Executive Officer Mark Sarvary commented, “Our performance during the fourth quarter was in line with our projections, both in North America and Internationally. We continued to see signs of stabilization in our North American business driven by initiatives we launched in the third quarter. Next week at the Las Vegas Market industry show we will announce further initiatives, including several new products that we believe will return Tempur-Pedic to growth in North America in 2013. Internationally, our fourth quarter results were consistent with our recent projections, but reflect a softening in demand due to macroeconomic weakness in Europe as expected. We are excited about new product introductions in our international business in 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 Corporation.”

Key Stats:

Revenue decreased 1.97% from $347.94 million in the previous quarter. Net income increased to $23.5 million in the quarter versus a net loss of $2.02 million in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.72 and has not changed. For the current year, the average estimate is a profit of $2.55, which is the same with that ninety days ago.

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(Company fundamentals provided by Xignite Financials.)