AT&T preferreds fall on disappointing earnings; Energy Transfer’s new preferreds lower

By James McCandless

San Antonio, April 25 – Preferred stock traders reported a day of higher-than-usual activity as earnings statements roll out through the week, though most of the market declined.

AT&T, Inc.’s preferreds slid as the company posted earnings and revenue numbers that did not reach analyst estimates.

Energy Transfer Partners, LP’s new preferreds led the market down and in volume again Wednesday.

Allstate Corp.’s recent issue also declined as the company grapples with a class-action lawsuit.

AT&T off on earnings

AT&T’s 5.35% global notes due 2066 saw a precipitous decline on Wednesday with about 466,000 shares trading after the company posted first-quarter earnings of 85 cents per share of common stock, where the average analyst estimate was 88 cents. It also posted a $1 billion loss in revenue.

The company is embroiled in two antitrust inquiries by the Department of Justice. One is over the effect of an attempted merger with Time Warner on consumer choice. The other concerns allegations over whether the company and Verizon cooperated to increase the difficulty for consumers in changing wireless carriers.

The preferreds lost 34 cents to close at $24.53.

Energy Transfer falls

Energy Transfer’s newly priced $450 million of series C fixed-to-floating rate cumulative redeemable perpetual preferred units took up much of the volume in the preferred market again as about 465,000 shares were traded.

The deal was priced after market close on April 18 with at 7.375% dividend attached.

The preferreds fell 10 cents to $24.60.

Allstate slides

Allstate’s recent $500 million pricing of $25-par 5.625% series G perpetual preferred shares, with about 422,000 of them changing hands, also trended downward.

The company was recently named in a class-action lawsuit as one of the companies that allegedly used false data to deliberately reduce the value of vehicles in total loss insurance claims in order to reduce claim payments to consumers.

The preferreds were down 9 cents to $24.93.

Indexes down

The Wells Fargo Hybrid & Preferred Securities Financial index fell 0.26%, climbing back up slightly after being down 0.33% early Wednesday.

The iShares US Preferred Stock ETF lost 15 cents to close at $37.02.

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