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Tempur-Pedic, Riverbed And Cepheid Stocks Plummet On Downbeat Outlook

 April 20, 2012 10:55 AM

(By R.Chandrasekaran) Shares of bedding manufacturer Tempur-Pedic International (NYSE: TPX), scientific and technical instruments maker Cepheid (Nasdaq: CPHD), and networking solution provider (Nasdaq: RVBD) are trading down after disappointing quarterly results and downbeat outlooks.

Tempur-Pedic International delivered first quarter net income of $56.2 million, up 16.4 percent from $48.3 million, and earnings increased 26.5 percent to 86 cents a share from 68 cents a share in the year-ago quarter. Net sales were 18 percent higher at $384.4 million than $325.8 million in the previous year quarter. While earnings topped estimates, revenues fell shy of expectations of $384.53 million.

[Related -Riverbed Technology, Inc. (RVBD): Turning Down $19 – A Smart Move?]

Sales benefited by 19 percent growth in the international division while North American sales witnessed 17 percent upside on a year-on-year basis.

While gross margin improved to 53.6 percent from 52.3 percent, operating margin slipped to 22.4 percent from 23.1 percent in the 2011 first quarter. The company will be rolling out new dealer programs in the June quarter.

Tempur-Pedic also backed its earlier 2012 earnings outlook of $3.80 - $3.95 a share and revenues of $1.60 - $1.65 billion, which is lower than Wall Street's predictions of $3.97 a share and revenues of $1.66 billion.

[Related -Riverbed Technology, Inc. (RVBD) Q3 Earnings Preview: On Target – At Best?]

Significantly, for the 9 brokerages with a TPX target price, the highest and lowest price targets for Tempur-Pedic shares are $100.00 and $85.00 respectively. No analyst rates the stock as Sell, nine analysts have a Strong Buy or Buy rating, whereas five analysts have a Hold rating.

During the 52-week period, shares of the company reached a high of $87.43 and a low of $46.53. The stock closed Thursday‘s regular trading at $83.75 losing $3.51 or 4.02 percent. Today, the stock is down nearly 20%..

Riverbed Technology is another company that is witnessing selling pressure from disappointing first quarter earnings. The company earned $7 million, down 46.2 percent from $13 million and earnings halved to 4 cents a share from 8 cents a share in the year earlier quarter. On an adjusted basis, profit slackened 2.9 percent to $33 million from $34 million, whereas earnings remained flat at 20 cents a share with the year-ago quarter. Revenues grew 12 percent to $183 million from the previous year quarter's $164 million.

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