Why Tempur Sealy Shares Popped

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Tempur Sealy 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.

Get in the game
Millions of Americans have waited on the sidelines since the market meltdown in 2008 and 2009, too scared to invest and put their money at further risk. Yet, those who've stayed out of the market have missed out on huge gains and put their financial futures in jeopardy. In our brand-new special report, "Your Essential Guide to Start Investing Today," The Motley Fool's personal finance experts show you why investing is so important and what you need to do to get started. Click here to get your copy today -- it's absolutely free.

The article Why Tempur Sealy Shares Popped originally appeared on Fool.com.

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.

Copyright © 1995 - 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.

Read Full Story