Sealy shares jump after second-quarter preview

NEW YORK (AP) — Shares of mattress maker Sealy Corp. jumped Friday after the company boosted investor optimism about its second-quarter gross margins and operating income and as an analyst upgraded the stock.

Shares rose 39 cents, or 22 percent, to $2.19 Friday morning.

Raymond James analyst Budd Bugatch upgraded the shares to "Outperform" from "Market Perform" on Friday, based on the company's late Thursday announcement previewing second-quarter results, which are scheduled to be reported on June 30.

Trinity, N.C.-based Sealy said it expects a second-quarter gross profit margin of 40.1 percent to 41.1 percent and operating income of $28 million to $30 million. The company anticipates revenue of $294 million to $301 million.

SunTrust Robinson Humphrey's Keith Hughes told clients the mattress maker's gross margin and operating income results "position Sealy to see improvement if volumes can just bottom out."

But the company's convertible rights offering may be a burden, Hughes said. Last month Sealy gave stockholders transferable subscription rights to buy up to about $177.1 million of its senior secured third lien convertible notes due 2016. The offering is set to expire on July 2.

Hughes reiterated a "Neutral" rating.