Teva notes drop after Q4 profit loss; Diebold issues surge after better than expected revenue

By James McCandless

San Antonio, Feb.13 – The distressed space continued to be wrapped up in earnings releases in Wednesday’s session.

Teva Pharmaceutical Industries Ltd.’s notes dropped after the company reported a loss for the fourth quarter.

Meanwhile, Diebold Nixdorf, Inc.’s issues surged after surprising the market with positivity in its earnings report.

Oil and gas name McDermott International, Inc.’s paper fell as the company prepares to incur a large accounting charge stemming from cost overruns on one of its projects.

Bristow Group Inc.’s notes continued to decline as the company reels from Monday’s poor earnings release and acquisition termination.

Another day of improving oil futures served as a backdrop for mixed results for California Resources Corp.’s issues and gains for Hornbeck Offshore Services, Inc.and Alta Mesa Resources, Inc.’s paper.

PG&E Corp.’s notes trended upward but held level as a major investor released a list of its choices to replace the current board of directors.

Pay-TV name DISH Network Corp.’s issues were negative after reporting fourth-quarter results, with a focus on its subscriber losses.

Teva drops

Teva’s notes dropped in the Wednesday session, traders said.

The 2.8% notes due 2023 fell 1¼ points to close at 89¼ bid. The 3.15% notes due 2026 shed 1¾ points to close at 81¾ bid.

On Wednesday, the Petach Tikva, Israel-based generic drug manufacturer issued its fourth-quarter earnings report.

The company showed a 53 cents per share loss, coming in below analyst estimates of 54 cents per share.

It also saw a revenue decrease of 16% compared to the same time in 2017.

“They’re facing a lot of competition,” a trader said. “There are also some people pulling for a fast turnaround here, but they’re not getting it. That’s added pressure.”

Diebold gains

Meanwhile, Diebold’s issues saw a surge, market sources said.

The 8½% notes due 2024 jumped 12½ points to close at 77 bid.

The North Canton, Ohio-based connected commerce solutions name released its fourth-quarter earnings on Wednesday.

It reported an 8 cents per share loss, missing analyst predictions of breaking even.

While the earnings were a disappointment, the notes surged on the back of better-than-expected revenues of $1.29 billion.

The company also expects cash flow to break even by the end of the year.

McDermott falls

Elsewhere, in oil and gas, McDermott’s paper was falling, traders said.

The 10 5/8% paper due 2024 shed 5¾ points to close at 85½ bid.

The Houston-based oil and gas engineering name announced that it expects to incur an adverse charge of $168 million in the fourth quarter based on cost overruns from its Louisiana-based joint venture building a liquefied natural gas facility.

In a Wednesday morning announcement, the company cited “unfavorable labor productivity, increases in subcontracts, and commissioning and construction management costs.”

Bristow declines

Also moving in the sector, Bristow’s notes continued to decline, market sources said.

The 8¾% notes due 2023 lost 3½ points to close at 71¾ bid. The 6¼% notes due 2022 shaved off 4¾ points to close at 19 bid.

The Houston-based helicopter name has been in sharp decline since after the close Monday, when it reported a 57 cents per share loss and the termination of its $560 million acquisition of Columbia Helicopters.

The deal was announced in November and delayed in January.

Oil names positive

Another day of gains in oil futures saw mostly similar results for distressed energy names, traders said.

Los Angeles-based independent oil and gas producer California Resources’ issues ended mixed.

The 6% notes due 2024 lost 2¼ points to close at 68 bid. The 8% notes due 2022 added 2 points to close at 79¾ bid.

Covington, La.-based petroleum transporter Hornbeck’s paper rose.

The 5% paper due 2021 ended 4 points higher to close at 53 bid.

Houston-based producer Alta Mesa’s notes were also gaining.

The 7 7/8% notes due 2024 picked up ½ point to close at 56 bid.

West Texas Intermediate crude oil futures for March delivery ended the Monday session 80 cents better, closing at $53.90 per barrel.

North Sea Brent crude futures for March delivery closed at $63.61 per barrel after gaining $1.19.

PG&E level

Despite positive trends, PG&E’s issues concluded level, market sources said.

The 6.05% notes due 2034, while pushing as high as 90½ bid, closed flat at 90 bid.

Early Wednesday, BlueMountain Capital Management, a large investor of the San Francisco-based electric utility announced that it had selected 13 people to replace the company’s current board members.

In an upcoming shareholder meeting in May, the company intends to replace a majority of its board, but has said that it will retain five members.

DISH off

DISH’s paper was also in decline, traders said.

The 7¾% paper due 2026 lost 2 points to close at 83¾ bid. The 5 7/8% paper due 2024 dropped 2½ points to close at 80¾ bid.

The Englewood, Colo.-based pay-TV name released its fourth-quarter report, posting earnings of 64 cents per share versus analyst predictions of 67 cents per share.

It also reported a loss of about 334,000 subscribers for the quarter.

“They’re facing a crunch from their problems with Univision and HBO, so there’s a lot weighing on them,” a trader said.

© 2015 Prospect News.
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