Morning Commentary: JPMorgan’s new issue widens; Capital One preferreds decline post-earnings

By Stephanie N. Rotondo

Phoenix, July 24 – The preferred stock market was again soft as trading got underway on Friday.

The Wells Fargo Hybrid and Preferred Securities Index was off 4 basis points at mid-morning.

In the primary space, JPMorgan Chase & Co.’s new $1.1 billion issue of 6.15% series BB noncumulative preferreds – a deal priced Wednesday via JPMorgan Securities LLC – was quoted at $24.76 bid, $24.82 offered early in the session.

That was slightly off from Thursday’s closing levels in a $24.80 to $24.82 range and down from the $25 par level at which the deal priced.

In the secondary, Capital One Financial Corp.’s preferreds were coming in as the market reacted to the company’s latest earnings release.

The 6.25% series C noncumulative perpetual preferreds (NYSE: COFPC) were down a nickel at $25.65 at mid-morning. The 6% series B noncumulative perpetual preferreds (NYSE: COFPP) were 4 cents weaker at $25.14.

For the quarter, the credit card servicer and banking institution reported a net profit of $863 million, or $1.50 per share. That compared to earnings of $1.2 billion, or $2.04 per share the year before.

On an adjusted basis, earnings per share came to $1.78.

Revenue, however, improved 3.7% to $5.67 million.

Analysts polled by Thomson Reuters had forecast adjusted EPS of $1.97 on revenue of $5.74 billion.

Additionally, Capital One announced layoffs in Virginia, Oregon and South Dakota.

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