NEW YORK (
surprised Wall Street late Thursday with a better-than-consensus forecast for its fiscal first-quarter results and a higher profit outlook for the full year.
The Lexington, Ky.-based mattress maker said it sees earnings of 67 to 68 cents a share on sales of roughly $325 million for the March-ended quarter, well above the current average estimate of analysts polled by
for a profit of 58 cents a share in the three-month period on sales of $289.1 million.
"First quarter sales and profits exceeded our prior expectations in both our North American and International segments," said CEO Mark Sarvary in a
. "During the quarter, we made progress in our effort to enhance our product range and significantly increased our investment in consumer marketing as we seek to capitalize on the considerable market share opportunity we see for our brand."
For the whole of fiscal 2011, Tempur-Pedic now sees earnings of $2.80 to $2.95 a share on sales of $1.31 billion to $1.36 billion. Back on Jan. 20, when the company reported its fourth-quarter results, the projection was for earnings of $2.60 to $2.75 a share for the year on sales of $1.23 billion to $1.28 billion.
The current average analysts' view is for Tempur-Pedic to post a profit of $2.71 a share on sales of $1.26 billion in 2011.
Tempur-Pedic also noted that it had repurchased 1.32 million of its common shares during the first calendar quarter at an average price of $47.35 per share, spending a total of $62.5 million.
The stock jumped in after-hours action, rising more than 10%. The shares were last quoted at $56.13, up $5.14, on volume of around 116,000, according to
. Based on the regular session close at $50.99, the stock had appreciated nearly 68% in the past year, hitting a new 52-week high of $52.88 on Wednesday.
Even with that run-up, Wall Street was bullish about Tempur-Pedic ahead of the positive outlook news. Of the 13 analysts covering the stock, nine rated it at either strong buy (7) or buy (2) with the remaining four at hold. The median 12-month price target of $50 showed some trepidation about valuation however.
The stock's forward price-to-earnings multiple, based on Thursday's close, sat at 16.2X the average fiscal 2011 earnings estimate.
That compares to an average blended P-E of 13X for the
, according to
data, but of course both the shares and the estimates are heading up now.
Written by Michael Baron in New York.
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