Tempur-Pedic

Tempur-Pedic International Inc. (TPX - Snapshot Report) posted its seventh consecutive earnings surprise on top-line growth and a better profit margin.

Company Description

Tempur-Pedic makes mattresses and pillows from the company's proprietary material.

Sales Rise 29%

Tempur-Pedic reported quarterly results on Jan 26 that included sales of $245 million, up 29% year-over-year. The company also improved its gross profit margin by 550 bps, to 48.5%.

Earnings for Tempur-Pedic came in at 38 cents per share, more than double the level one year ago. Analysts were expecting 37 cents, making this the seventh straight earnings surprise.

Buyback Announced

In the same announcement, Tempur-Pedic said that it will repurchase up to $100 million of shares. The timing or type of purchase was not specified.

Rising Estimates

Full-year estimates for 2010 and 2011 are rising as a result of the recent surprise. The Zacks Consensus Estimates for this year is now $1.50, up from $1.26. Projections for next year are averaging $1.79, up from $1.52.

If these levels are met, the year-over-year growth rates will be 34% and 20%, respectively.

The Chart

Shares of Tempur-Pedic did not see a big move on the news because the company reported preliminary results earlier in January, highlighted by the yellow arrow below. However, shares are still trading above the preannouncement level.

Read the full analyst report on TPX