Tempur-Pedic's 2Q earnings drop 39 percent

In the quarter ended June 30, Tempur-Pedic said it earned $20.2 million, or 27 cents per share, down from $32.9 million, or 39 cents per share, in the same quarter last year.

The results beat the expectations of analysts, who had predicted earnings per share of 23 cents on revenue of $232.9 million, according to a poll by Thomson Financial.

Sales fell 7 percent from last year's $257.6 million. Domestic sales sank 13 percent, while international sales grew 4 percent. But on a constant currency basis, international net sales slid 9 percent.

Domestic and international sales continued to weaken, especially in the end of the quarter, President and Chief Executive H. Thomas Bryant said in a statement. He said the company is reducing costs and improving productivity in factories.

Bryant added the company will remain focused on its premium products and plans an extensive new product launch in the next few quarters. Tempur-Pedic plans to unveil two new mattress models and an upgraded DeluxeBed. New mattresses and pillows are being introduced internationally as well.

Tempur-Pedic cut its full-year guidance for sales and earnings, citing tough economic conditions that have led to sharply lower store traffic. It now expects sales to range from $980 million to $1.02 billion, down between 8 percent and 11 percent from 2007. Earnings per share are expected to range from $1.05 to $1.20 a share, down by as much as nearly 40 percent from last year's earnings per share of $1.74.

Analysts are expecting earning per share of $1.15 on sales of $1.02 billion.

In April, Tempur-Pedic forecast a full-year profit of $1.20 to $1.45 per share, on sales of $1.01 billion to $1.07 billion.

For the six-month period, net sales fell 7 percent to $485.9 million from $523.7 million. Net income plunged 46 percent to $33.7 million from $62.7 million in the prior-year period.