Morning Commentary: Preferreds open mixed; Colony NorthStar weakens on earnings

By Abigail W. Adams

Portland, Me., March 1 – The preferreds market opened Thursday mixed with the Wells Fargo Hybrid & Preferred Securities Financial index flat and the U.S. iShares Preferred Stock ETF up 0.36% early in the session.

While the broader market was mixed, Colony NorthStar’s preferreds were nosediving in high-volume trading early Thursday after the Los Angeles-based diversified equity REIT announced fourth-quarter and year-end results prior to the market open.

Colony NorthStar’s 7.125% series J cumulative redeemable perpetual preferred stock was down to $22.20, a decrease of $1.53 or 6.45%, early in the session.

The preferreds saw more than double their average daily trading volume less than two hours after the opening bell.

Colony NorthStar’s 7.15% series I cumulative redeemable preferred stock was down to $22.51, a decrease of $1.39 or 5.82%, early in the session.

Colony NorthStar reported a fourth-quarter net loss of $368.1 million, or 69 cents per share, and a net loss of $333.1 million, or 64 cents per share, for 2017. Colony NorthStar also announced a reduction in the quarterly dividend on common stock.

The board of directors authorized a dividend of 11 cents for the first-quarter targeting an annual dividend of 44 cents.

The dividend on common stock was 27 cents in the fourth-quarter and $1.05 for 2017.

While Colony NorthStar preferreds were down, they still fared better than the company’s common stock, which was down 27.12% early Thursday.

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