Weatherford down as company delays earnings; Dean Foods moves higher; CHS paper rises

By James McCandless

San Antonio, May 8 – Wednesday in the distressed space saw continued focus on earnings-related names.

Weatherford International plc’s notes moved down after the company announced a delay in releasing its first-quarter earnings.

Meanwhile, as oil futures improved, California Resources Corp.’s issues also gained as Ensco Rowan plc’s paper closed mixed and Chaparral Energy, Inc.’s notes fell.

Elsewhere, Dean Foods Co.’s issues continued to trend higher after Tuesday’s earnings release.

In health care, Community Health Systems, Inc.’s paper rose as the company signals an end to its continuous asset sales.

Drug maker Mallinckrodt plc’s notes finished mixed a day after its earnings release.

Retailer PetSmart, Inc.’s issues were headed lower throughout the day.

Neiman Marcus Group, Inc.’s paper improved elsewhere in the retail sector.

Weatherford down

Weatherford’s notes were pushed down in the Wednesday session, traders said.

The 8¼% notes due 2023 dropped 1¾ points to close at 65¼ bid. The 9 7/8% notes due 2024 lost 3 points to close at 65 bid.

The 8¼% notes saw $16 million of the bonds on the tape by the end of the afternoon.

Early Wednesday, the Baar, Switzerland-based oilfield services provider announced that it would be delaying the release of its first-quarter earnings results.

Originally scheduled for release on Wednesday morning, the company canceled its scheduled conference call and said that the report would be filed on Friday morning.

“There’s never a good reason for this,” a trader said. “We’re expecting the worst.”

Oil names mixed

As oil futures improved, recovering part of Tuesday’s losses, distressed energy tranches varied in direction, market sources said.

Los Angeles-based independent oil and gas producer California Resources’ issues were gaining.

The 8% notes due 2022 added 1¼ points to close at 77¾ bid.

London-based contract driller Ensco Rowan’s paper saw mixed activity.

The 5.2% paper due 2025 shed ½ point to close at 77½ bid. The 7¾% paper due 2026 picked up ¼ point to close at 83¼ bid.

Oklahoma City, Okla.-based producer Chaparral’s notes were falling.

The 8¾% notes due 2023 shaved off ¾ point to close at 72¾ bid.

West Texas Intermediate crude oil futures for June delivery picked up 72 cents by the end of the session, finishing at $62.12 per barrel.

North Sea Brent crude oil futures for July delivery closed at $70.37 per barrel after a 49 cent gain.

Dean Foods higher

Elsewhere, Dean Foods’ issues continued to move higher, traders said.

The 6½% notes due 2023 rose 2½ points to close at 58 bid.

On Tuesday, the 6½% notes saw a 4-point boost.

The two-day positive run was sparked after the Dallas-based dairy products producer released its first-quarter earnings report early Tuesday.

Earnings were reported at a loss of 41 cents per share compared to the expected 22 cents per share loss.

Its $1.8 billion in revenues were also a disappointment.

The market saw a bright spot in the company’s cost-cutting measures that are part of a turnaround effort.

The name expects to report a net positive cash flow by the end of the next quarter.

Community Health rises

Meanwhile, in the health care space, Community Health’s paper was on the rise, market sources said.

The 6 7/8% paper due 2022 tacked on 3¼ points to close at 70 bid.

Last week, the Franklin, Tenn.-based hospital operator put out its first-quarter earnings report.

The company showed a loss of 53 cents per share, wider than the 44 cents per share predicted by analysts.

In a conference call, chief executive officer Wayne Smith said that its systematic sell-off of hospitals would stop by the end of 2019.

The divestiture program, which saw 13 hospitals sold in 2018 and five sold in 2019, was part of the company’s overall debt reduction plan.

“They’re pretty confident in a turnaround,” a trader said. “It looks about fifty-fifty at this point.”

Mallinckrodt mixed

Elsewhere in the medical sector, Mallinckrodt’s notes saw mixed results, traders said.

The 4¾% notes due 2023 added ¼ point to close at 74 bid. The 5 5/8% notes due 2023, while slipping to 78 bid during the day, finished level at 78¾ bid.

The Staines-upon-Thames, U.K.-based pharmaceuticals name announced first-quarter earnings results on Tuesday.

The company reported earnings of $1.94 per share and $790.6 million in revenues, both exceeding expectations.

PetSmart down, Neiman gains

In retail, PetSmart’s issues trailed during the session, market sources said.

The 8 7/8% notes due 2025 lost ½ point to close at 91¼ bid. The 5 7/8% notes due 2025 fell ¾ point to close at 92½ bid.

The Phoenix-based pet supplies chain continues to see heightened attention after the company filed to launch a $100 million initial public offering for e-commerce segment Chewy.com.

The move represents a culmination of a prolonged dispute between the name and its creditors over access to Chewy.com.

Dallas-based sector peer Neiman Marcus’ paper saw gains.

The 8% paper due 2021 gained 2 points to close at 54 bid.

© 2015 Prospect News.
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