Morning Commentary: Workday convertible notes in focus in early trading post-earnings

By Abigail W. Adams

Portland, Me., Aug. 28 – The convertibles secondary space saw an active start to the day with $86 million in reported volume about one hour into the session.

However, one name was dominating the trading activity – Workday Inc.

Workday’s 0.25% convertible notes due 2022 were in focus and making large gains on an outright basis as stock broke out to a new 52-week high following the company’s second-quarter earnings report.

The 0.25% notes rose almost 16 points outright with stock up more than 10% early in the session.

They were changing hands at 170 with more than $14 million bonds on the tape early in the session.

Workday stock set a new 52-week high and traded up to $247.90 soon after the opening bell.

Stock was $241.78, an increase of 11.61% shortly before 11 a.m. ET.

The financial management and human resources software company reported second-quarter earnings per share of 84 cents versus analyst expectations for earnings per share of 66 cents.

Revenue was $1.06 billion versus analyst expectations for revenue of $1.04 billion.

Stock was also trading up after the company raised its forward guidance.

Revenue guidance for the fiscal year was raised to $3.73 billion to $3.74 billion as a result of the strong quarter.

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