NewPage debt remains weak; ATP Oil gyrates on earnings; Clear Channel trades ahead of numbers

By Stephanie N. Rotondo

Portland, Ore., Aug. 6 - Quarterly financials continued to cause market flurries on Friday.

NewPage Corp.'s earnings release from the previous session was still weighing on the debt. However, the declines in Friday trading were significantly less than the massive drop seen on Thursday.

Meanwhile, ATP Oil & Gas Corp. announced its results, reporting a production output of around half of what had been forecast. The disappointing numbers caused the bonds to gyrate throughout the day, finally ending a few points weaker on the day.

Clear Channel Communications Inc. will announce its results next week. On Friday, investors were feeling things out ahead of time.

NewPage debt remains weak

NewPage's notes continued to be under pressure during the final trading day of the week, traders reported.

However, the bonds - which had lost 4 to 8 points, depending on the issue, on Thursday after poor quarterly results - did not see as massive a loss, dropping only about half a point.

Several market sources placed the 11 3/8% notes due 2014 in an 871/2-87¾ range. Though that issue was active, a trader noted that the 10% notes due 2012 were on the quiet side.

On Thursday, the Miamisburg, Ohio-based papermaker reported its second-quarter results, showing a 21% increase in sales to $890 million. Net loss, however, widened to $174 million from $6 million the year before.

"With improving underlying demand, we are working diligently to position the company to take full advantage of the market improvement," said George F. Martin, president and chief executive officer, in the earnings release.

Interest expense for the quarter increased to $92 million from $67 million, mainly due to higher interest rates. The company ended the quarter with $120 million in liquidity, which consisted of $7 million in cash and equivalents and $113 million available borrowings under a revolving credit facility.

Though the company expressed optimism about the remainder of the year, other market-watchers encouraged caution.

As reported previously, an analyst who follows NewPage said that "the main takeaways from the call were that people were looking for a sequential improvement in the results," and they didn't get it, and "now one of the asset sales is delayed, and that introduces uncertainty."

The analyst reiterated, "Keep in mind that this was not the make-or-break quarter - the third quarter is." He said that people "could brush off the second quarter results and say 'oh, it's the third-quarter that matters,' and they would be absolutely right."

However, he cautioned, "At the end of the day, they missed their numbers."

ATP gyrates following earnings

In other earnings news, ATP Oil & Gas released its quarterly figures on Friday. As a result, traders said the bonds were trading "all over the place."

One trader said the 11 7/8% notes due 2015 started the day weaker around 80, moved up to 811/2, back down to 80 and then finished up the day at 78½ bid, 79½ offered.

Another trader agreed with the 781/2-79½ market, which compared with 81½ bid, 82½ offered the previous trading day.

The Houston-based oil and gas company reported a loss of $82.9 million, or $1.63 per share, compared with a loss of $4.4 million, or 12 cents per share, the year before.

The loss was impacted by a $78.2 million charge related to its debt-refinancing efforts.

Revenues meantime gained 25% to $101.1 million.

According to a Thomson Reuters poll, analysts had been expecting a loss of 19 cents per share on revenues of $122.3 million.

Furthermore, the company said it was hurt by an offshore drilling moratorium that came in the wake of the April 20 oilrig explosion in the Gulf of Mexico. ATP posted an $8.7 million charge due to the shuttering of some of its drilling locations in that area.

And, according to a market source, ATP produced half of what it had previously estimated.

"Now it's just a function of who is going to buy them and what is it going to look like after that," the source said.

Clear Channel trades ahead of numbers

Clear Channel Communications is expected to deliver its second-quarter earnings on Monday and investors were jockeying for position ahead of time.

A trader said there was "some activity" in the 11% notes and 10¾% notes due 2016. He saw the 11% notes "straddling" 73, while the 10¾% notes closed at 78 bid, 78½ offered.

"That's maybe a smidge better," he said.

Another trader, however, said the bonds ended "exactly where it was" the day before, the 11% notes around 73 and the 10¾% notes around 781/4.

Yet another trader placed the debt around the same levels as the second trader.

Clear Channel Communications is a San Antonio-based multimedia company.

© 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.