Yahoo! slips after weak earnings; Proofpoint adds on swap after earnings; Illumina eyed

By Rebecca Melvin

New York, April 22 – Earnings was the main driver of convertibles trading on Wednesday, sources said.

Yahoo! Inc.’s convertibles traded steadily on an outright basis but were lower by about 0.5 point on a dollar-neutral, or hedged, basis after the Sunnyvale, Calif.-based internet company reported first-quarter results that missed estimates.

Proofpoint Inc.’s convertibles were down about 6 points on an outright basis but were better by about 0.5 point on swap after the Sunnyvale, Calif.-based security-services vendor missed earnings estimates and lowered its full-year earnings estimate. The company, however, reported stronger current and future revenue.

The Proofpoint 1.25% convertibles were seen at 153.125 versus an underlying share price of $56.00, a New York-based trader said. That was up 0.5 point on a delta of about 85%.

Illumina Inc.’s convertibles were essentially mute after the San Diego-based developer of genetic research tools reported strong quarterly earnings that beat estimates, but shares moved lower.

Illumina shares came off $9.27, or 4.7%, to $190.04.

Traders said there was not much going on in the secondary market, and there were no new issues launched or priced in secondary market action.

“We’re going micro story today, as opposed to the broader macro,” a trader said, indicating that earnings news was the emphasis and other news, including economic data, wasn’t much of an influence.

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