Tempur-Pedic shares plunge after-hours on loss
LEXINGTON, Ky. (AP) — Tempur-Pedic International Inc.'s shares plunged more than 18 percent in after-hours trading Tuesday after the specialty mattress maker posted a third-quarter loss, reported a decline in mattress sales and cut its full-year outlook.
The company said tough competition continued to weigh on its business in North America and the weak economy softened demand in Europe. CEO Mark Sarvary said management remains confident about the company's growth potential and is excited about its proposed acquisition of Sealy Corp.
Tempur-Pedic, known for its memory foam mattresses, announced in September that it would buy its longtime rival Sealy for about $228.6 million. The deal would expand the types and price ranges of mattresses and ranges that Tempur-Pedic offers.
The company struggled to sell customers on its high-end products during the third quarter. It said its total mattress sales fell 11 percent globally, with a 15 percent drop in North America and 1 percent increase on an international basis. Its pillow sales increased 11 percent globally.
The company posted a loss of $2 million, or 3 cents per share, for the quarter that ended Sept. 30. That compares with a profit of $61.9 million, or 90 cents per share, in the same quarter last year. After adjusting for costs tied to the Sealy deal and repatriation of foreign earnings, the company earned 70 cents per share.
Tempur-Pedic's total revenue fell 9 percent to $347.9 million.
Analysts polled by FactSet were expecting the company to earn 69 cents per share on revenue of $362.7 million.
Tempur-Pedic lowered its full-year forecast based on the trends. The company expects to earn $2.55 per share for 2012 on revenue of $1.4 billion, down from an earlier projection of $2.80 per share on revenue of $1.43 billion.
Analysts had expected earnings of $2.78 per share on revenue of $1.43 billion.
The company's stock plunged $5.87 to $26. Tempur-Pedic's shares were already near the low end of their 52-week trading range of $20.70 to $87.43. Its shares fell $1.54 to close regular trading at $31.87 Tuesday.