Preferreds under pressure; MetLife earnings pressure shares; Duke reports profit but falls

By Stephanie N. Rotondo

Phoenix, Aug. 1 - The first day of August saw preferred stocks slipping, according to a trader.

"Things are generally weaker," he said. "It's another boring day of slowly losing money."

There were no new issues announced as of midday, and the trader said he wasn't hearing talk of anything planned for the coming weeks.

However, a market source said after the close that overall activity was "moderate." Trading in the first half of the week was characterized as "light," so the volume did improve somewhat, he said.

In the secondary, MetLife Inc.'s preferreds dominated trading but declined as the insurance company said that its bond portfolio saw a $10.9 billion loss during the second quarter. Its profit dropped 78%.

In other earnings news, Duke Realty Corp. was slipping, despite seeing a swing to profit in the second quarter.

The real estate investment trust said the earnings were boosted by property sales.

Also, after the bell, JPMorgan Chase & Co. said it was redeeming all $1.8 billion of its 8.625% series J noncumulative preferreds. The issue has been very active of late, and a market source said that speculation of the potential call was likely driving the activity.

MetLife takes a hit

MetLife's 6.5% series B noncumulative preferreds (NYSE: METPB) were down 14 cents following a conference call Thursday morning to discuss the company's most recent quarterly results.

The preferreds ended the day at $25.05.

Profit during the quarter dropped 78%, which the company said was due to net derivative losses.

Total profit came to $510 million, or 43 cents per share, which compared to a profit of $2.3 billion, or $2.12 per share, the year before.

Operating revenues gained 1.8% to $17.04 billion.

However, the results missed expectations. Analysts polled by Thomson Reuters had forecast earnings of $1.33 per share on revenues of $17.33 billion.

The results included derivative losses of $1.69 billion.

Additionally, the insurance company said its net unrealized gains fell to $20.9 billion, down from $31.8 billion in the first quarter. The $10.9 billion decline was based on a bond-market rout that occurred during the second quarter, which was caused by concerns over when the Federal Reserve would begin tapering its stimulus program.

Duke falls despite profit

Duke Realty's 6.6% series L cumulative preferreds (NYSE: DREPL) were active but weaker, falling 4 cents to $24.95 at midday.

At the close, the issue was off only 2 cents at $24.97.

The decline came despite the company reporting a swing to profit for the second quarter late Wednesday.

Profit for the quarter was $61.5 million, or 19 cents per share, versus a loss of $28.5 million, or 11 cents per share, the year before.

The Indianapolis-based REIT attributed the gain to property sales.

Revenues improved 5.6% to $275.5 million while rental income gained over $27 million.

The company's portfolio occupancy rate was 93.2%, compared to 92.1% in the first quarter.

JPMorgan calls series Js

JPMorgan Chase announced late Thursday that it would redeem all $1.8 billion of its 8.625% series J noncumulative preferreds (NYSE: JPMPI).

Ahead of the news, the preferreds were up 8 cents at $25.09.

The issue has been consistently active of late. A market source said speculation of the potential call was likely the cause of the action, though he noted that the timing was probably sooner than expected.

The redemption date is Sept. 3.

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