UPDATE 1-Sealy posts surprise Q1 profit

Tue Mar 31, 2009 5:51pm EDT

* Q1 adj EPS $0.04 vs est loss/shr $0.03: Reuters Estimates

* Q1 revenue $310 mln vs rev view $309.5 mln

March 31 (Reuters) - Sealy Corp ZZ.N, the world's largest mattress maker, posted a surprise first-quarter profit as expenses dropped, helped by its cost-cutting measures.

The bedding maker, whose brands include Sealy, Sealy Posturepedic, Stearns & Foster and Bassett, posted a profit of $4.7 million, or 5 cents a share, including a gain of 1 cent a share related to the sale of equity in its Korean subsidiary.

The Trinity, North Carolina-based company had reported net income of $16.2 million, or 17 cents a share, in the year-ago quarter.

Sales for the quarter ended March 1 fell 21 percent to $310 million.

Sealy and its competitors in the bedding industry like Tempur-Pedic (TPX.N) and Select Comfort (SCSS.O) have been struggling with softer sales at its U.S. markets after cash-strapped shoppers cut down on their appetite for big-ticket items amid falling home values, rising gasoline prices and tighter lending conditions.

Several bedding companies such as Mattress Discounters, Mattress Gallery and Foamex International Inc have even filed for bankruptcy protection.

However, Sealy's selling, general and administrative expenses fell 17 percent for the quarter.

Shares of the company closed at $1.49 Tuesday on the New York Stock Exchange. (Reporting by Sumedha Mukherjee in Bangalore; Editing by Deepak Kannan)

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