Ensco Rowan, PG&E slip post-earnings; Teva Pharmaceutical lower after mixed earnings results

By James McCandless

San Antonio, May 2 – The distressed space continued to focus its attention on names with earnings releases.

Ensco Rowan plc’s notes slipped after reporting an earnings loss for the first quarter after the close on Wednesday.

Sector peer California Resources Corp.’s issues declined before the company released its earnings numbers after Thursday’s close.

As oil futures declined, Weatherford International plc’s paper followed suit while Halcon Resources Corp.’s notes gained.

In health care, Teva Pharmaceutical Industries Ltd.’s issues moved lower after the company posted a mixed earnings report.

Mallinckrodt plc’s paper improved, snapping a five-day negative run spurred in part by an expanding whistleblower lawsuit against the name.

Electric utility PG&E Corp. saw its notes drop after beating earnings estimates but disappointing on revenues.

Elsewhere, Frontier Communications Corp.’s issues finished mixed a day after the company released its first-quarter earnings.

Retailer PetSmart, Inc.’s paper finished the session gaining.

Ensco Rowan slips

In the energy space, Ensco Rowan’s notes slipped in Thursday activity, traders said.

The 5.2% notes due 2025 fell 1¾ points to close at 78 bid. The 7¾% notes due 2026 dropped 2½ points to close at 83½ bid.

The day saw $23 million of the 7¾% notes trading.

After the close on Wednesday, the London-based contract driller released its first-quarter earnings report.

The company reported an adjusted loss per share of $1.69, which was not as bad as the $1.79 loss per share that analysts had expected.

Revenues were reported at $405.9 million, coming in below estimates.

“I would call these numbers cautiously optimistic,” a trader said. “There’s more to see down the line now that the merger is done.”

Last month, Ensco and sector peer Rowan completed a merger announced in October 2018 in a deal worth $12 billion.

CalRes lower

Sector peer California Resources’ issues also moved lower, market sources said.

The 6% notes due 2024 declined by 2½ points to close at 67½ bid. The 8% notes due 2022 went negative by 1¾ points to close at 74¼ bid.

The Los Angeles-based independent oil and gas producer reported a 63 cents per share profit, surpassing analysts predictions of a loss of 50 cents per share.

“As far as distressed energy goes, CRC continues to be a bellwether,” a trader said before the report was released. “It’s going to be a picture of where independent producers are right now.”

The company’s structure has come under pressure in recent months amid selloffs and a potential for a tightened regulatory environment in its home state.

Oil futures down

Distressed oil tranches were mixed as oil futures took a negative turn, traders said.

Baar, Switzerland-based oilfield services provider Weatherford’s paper followed oil futures.

The 8¼% paper due 2023 shaved off ½ point to close at 68 bid. The 9 7/8% paper due 2024 lost ¾ point to close at 68¼ bid.

The company plans to submit a proposal to shareholders for a 1-to-20 reverse stock split in a bid to regain New York Stock Exchange compliance.

Houston-based producer Halcon’s notes gained, bucking the sector’s trend.

The 6¾% notes due 2025 picked up 1 point to close at 65¼ bid.

West Texas Intermediate crude oil futures for June delivery lost $1.79, ending the session at $61.81 per barrel.

North Sea Brent crude oil futures for July delivery closed at $70.75 per barrel after a $1.43 decline.

Teva lower, Mallinckrodt up

In pharmaceuticals, Teva’s issues were lower by the close, market sources said.

The 4.1% notes due 2046 shed ¾ point to close at 70¾ bid. The 3.15% notes due 2026 gave back 1 point to close at 83½ bid.

On Thursday morning, the Petah Tikva, Israel-based generic drug maker released an earnings report for the first quarter that showed mixed results.

Earnings were reported as a 60 cents per share profit, just beating analyst predictions of a 58 cents per share profit.

On the other side of the coin, the company lagged with $4.3 billion in revenues.

In a tightening generic drug market, the name reported less-than-stellar sales for Copaxone, its multiple sclerosis treatment.

“That’s not helping their debt problem, which remains a huge issue,” a trader said.

Staines-Upon-Thames, England-based sector peer Mallinckrodt’s paper improved, ending a five-day negative streak.

The 4¾% paper due 2023 jumped up 3¼ points to close at 71 bid.

The company’s paper was sent lower into distressed territory on Tuesday after the U.S. Department of Justice announced that it would be joining two whistleblower lawsuits against the name.

PG&E drops

In utilities, PG&E’s notes saw a drop in the session, traders said.

The 4¼% notes due 2046 fell 1 point to close at 88¾ bid. The 3.95% notes due 2047 lost ½ point to close at 86½ bid.

The San Francisco-based bankrupt electric utility was another company to report its earnings Thursday morning.

The name showed a $1.04 per share profit, surpassing analyst predictions of a 90 cents per share profit.

Revenues were a slight disappointment to analysts at $4 billion.

Frontier mixed

Meanwhile, Frontier’s issues ended the day mixed, market sources said.

The 10½% notes due 2022 shaved off ¼ point to close at 73½ bid. The 11% notes due 2025 added ¼ point to close at 66¼ bid.

After the Tuesday close, the Norwalk, Conn.-based wireline communications name reported an 18 cents per share loss for the first quarter.

Analysts were expecting a 10 cents per share loss.

PetSmart rises

Retailer PetSmart’s paper was on the rise, traders said.

The 8 7/8% paper due 2025 picked up ½ point to close at 90 bid. The 5 7/8% paper due 2025 gained ¾ point to close at 92¼ bid.

On Monday, the Phoenix-based pet supplies chain announced that it would launch an IPO for its e-commerce segment Chewy.com.

“It’s seen a steady stream of activity this week,” a trader said.

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