WorldCom, Revlon losses continue; Collins & Aikman continues trek higher

By Carlise Newman

Chicago, Nov. 19 - WorldCom Inc.'s losses stretched further Wednesday after releasing a weaker monthly operating report late Monday.

WorldCom's 8¼% notes due 2011 were down slightly, about ¼ of a point lower at 34¼ bid. The bonds had fallen a ½ point Monday ahead of the report and an additional ½ point Tuesday.

WorldCom recorded $1.95 billion in revenue for September versus $2 billion in August 2003.

Operating income for September was $88 million, a decline of $50 million from August, primarily reflecting lower revenues. Sales, general and administrative expenses were flat month-over-month, including $47 million in August and $55 million in September for restatement and audit expenses.

Meanwhile Revlon Inc. bonds were slightly lower Wednesday, three trading sessions after the company said that Ron Perelman's MacAndrews & Forbes Holdings Inc. has agreed to provide up to $125 million to the cosmetics company in 2004 to enable the company to continue to execute its plan.

Revlon's 8½% notes due 2006 were down ½ a point to 66½ bid, 69½ offered, according to a trader. On Friday, after the cash injection was announced, that issue added 2 points, and rose an additional point Monday before abandoning the rally Tuesday by dropping ½ a point.

"The bonds had been doing pretty well for a while there. But the upside had to end at some point," he said. "And the longer it takes them to get back in shape, the lower they're going to go."

Revlon is more than 80% controlled by Perelman.

Meanwhile, Collins & Aikman Corp. bonds continued better Wednesday. Its 11½% notes due 2006 were up 2 points at 85½ bid, according to a trader. The notes rose 3 points Tuesday. An investment bank put out positive research on the company Tuesday, giving a lift to the bonds.

Last Thursday Collins & Aikman reported a narrower third-quarter loss on lower expenses and reaffirmed its 2003 guidance, excluding restructuring and impairment charges.

The Troy, Mich.-based auto supplier said its third-quarter loss was $32.1 million, or 38 cents a share, compared with a loss of $45.2 million, or 54 cents a share, last year.

In 2002, Collins & Aikman reported a loss of $53.5 million, or $1.18 a share, including $56.9 million in restructuring and impairment charges. Excluding items, the loss was 8 cents a share.

In other news, Enron Corp. bonds were still bumping higher after the company said it will sell its Portland General Electric utility to funds managed by Texas Pacific Group for $2.35 billion.

Enron said it has signed an agreement with a new company called Oregon Electric Utility Co., which is financially backed by funds managed by Texas Pacific, a private equity investment firm.

The transaction has been approved by the Enron board of directors and is supported by the official unsecured creditors' committee in Enron's bankruptcy proceedings.

The Houston energy company's 8% notes due 2005 were seen at 46 bid, 49 offered, one point higher, one trader said. On Tuesday the bonds jumped 2 points from where they had last been seen trading.

"I think this was just a big relief to the investors who had been waiting for it for a long time," he said.

In other news, J.L. French Automotive Casting Inc.'s 11½% notes due 2009 were down 1 point to 47 bid, according to a trader.

In early November, the company reported that its losses grew during the third quarter because of restructuring and other charges of more than $100 million.

The Minneapolis-based company said it took a $96 million non-cash charge to write off goodwill and a $6.7 million charge for assets at its Saltillo, Mexico, facility during the quarter. Net loss for the quarter ended Sept. 30 was $116.4 million, compared to a net loss of $1.6 million in the same period last year.

J.L. French reported sales were down 13.9 percent to $114.2 million, from $132.6 million during the third quarter last year.

Loral Space and Communications Inc.'s 10% notes due 2006 were down 2 points to 74½ bid. That same issue had dropped 3 points on Tuesday, and last week was trading in the high 70s.

WestPoint Stevens Inc.'s 7 7/8% notes due 2008 down ½ point to 13½ bid. The bonds have been steadily dropping about a point per day since the company released weak third-quarter earnings last Friday. On Tuesday, the West Point, Ga.-based home furnishings manufacturer said it will lay off 300 people at its Lanier, Ala. plant as it moves production to plants that are better able to meet styles that are in demand.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.