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What: Shares of Tempur Sealy (NYSE:TPX) were helping investors sleep easier today, gaining 12% after a strong third-quarter earnings report.
So what: The recently merged mattress maker beat earnings estimates by $0.05, with a per-share profit of $0.73, up from $0.70 a year ago. Sales, meanwhile, increased 111.4%, due to the acquisition, to $735.5 million, topping expectations of just $710 million. Tempur North America sales improved 0.6%, but the international segment struggled due to weakness in Europe, falling 3.6%. CEO Mark Savary said, "The integration with Sealy continues to progress well, cost synergies continue to track to our plan, and we remain very excited about our ability to capture significant revenue synergies."
Now what: With the acquisition, Tempur Sealy became the world's largest bedding provider, but recent results have been shaky and shares are still down from where they were when the merger took place. The combination should be a boon long term as management further integrates the two companies, but full-year EPS guidance was average at $2.25-$2.40. Analysts had been expecting $2.33. I wouldn't expect today's jump to become a pattern.
Fool contributor Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of Tempur Sealy International. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.