Morning Commentary: Endeavour lower after earnings; GT Advanced Technologies, Akorn shares gain

By Rebecca Melvin

New York, Aug. 5 – U.S. convertibles players were focused on a number of earnings reports posted by issuers between late Monday and Tuesday.

Endeavour International Corp. saw its 5.5% convertibles due 2016 quoted at 41 bid, 45 offered as shares of the Houston-based oil and gas exploration and production company fell about 12% after the company posted a wider adjusted net loss for its quarter but said that physical production exceeded revised guidance.

A slide of that amount for a $1.00 stock isn’t much, a New York-based trader said of Endeavour, and “the converts trade like once every few months.”

Penn Virginia Corp.’s perpetual preferred shares were quoted at 100.60 bid, 101.30 offered with the underlying shares of the Radnor, Pa.-based oil and gas driller at $13.14, which was Monday’s closing mark. The Penn Virginia shares on Tuesday were last down about 5% to $12.49.

Penn Virginia announced closing of the sale of its Mississippi assets was for about $73 million and that it received about $35 million in an arbitration settlement related to its 2013 Eagle Ford acquisition.

Meanwhile, the shares of some convertibles issuers jumped to the upside.

GT Advanced Technologies Inc.’s stock jumped after earnings, and its newer 3% notes due 2020 were quoted at 149 bid, 148.75 offered with the shares at $15.25, a New York-based trader said.

GT Advanced also has an older 3% convertible due 2017.

Akorn Inc.’s shares were up a chunk after the Buffalo Grove, Ill.-based pharmaceutical company said it won U.S. antitrust approval to buy VersaPharm for $440 million on condition that it sell its rights to a generic version of the tuberculosis drug rifampin, which it has agreed to do.

Akorn also beat earnings and revenue estimates and raised its full-year guidance above consensus.

Akorn’s 3.5% convertibles due 2016 were not heard in trade.

In the broader markets, the major U.S. equity indices were lower despite two better-than-expected economic reports. The ISM services report for July rose to 58.7 from 56.0 in June, and economists had been expecting it to come in at about 56.3 to 56.5.

Also factory orders rose 1.1% in June, which was better than the forecast for a 0.5% rise.

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