Mattel notes higher after beating earnings estimates; Tata Motors issues lower as Jaguar disappoints

By James McCandless

San Antonio, Feb. 8 – The end of the week in the distressed market was marked by more earnings releases.

Mattel, Inc.’s notes were rising after the company showed a profit in its fourth-quarter earnings report.

Sector peer L Brands, Inc.’s issues were mixed while J.C. Penney Co., Inc.’s paper gained.

Meanwhile, Tata Motors Ltd.’s notes declined after it reported a $3.9 billion loss.

Elsewhere, Adient plc’s issues continued to drop a day after the company released its negative earnings report.

In energy, Rowan Cos. plc’s paper fell amid the company announcing that proxy advisers recommended that shareholders vote yes on a merger with Ensco.

Despite gaining oil futures, California Resources Corp.’s notes were mixed as Hi-Crush Partners LP’s issues fell.

PG&E’s paper saw a boost in the utilities sector.

Mattel rises

Mattel’s notes closed the week higher, traders said.

The 6.2% notes due 2040 gained 3½ points to close at 84½ bid. The 5.45% notes due 2041 picked up 3¾ points to close at 80¾ bid.

After the close on Thursday, the El Segundo, Calif.-based toy manufacturer outperformed market expectations in its fourth-quarter earnings report.

The company posted a profit of 4 cents per share versus analyst predictions of an 11 cents per share loss.

It also beat out revenue estimates with $1.52 billion.

The company singled out Barbie dolls as one of its top sellers in the holiday period.

“It’s a bit of a shock,” a trader said. “Everybody talked about how Mattel would adapt to Toys-R-Us folding. So unlike Hasbro, it looks like they’ve found a way.”

Columbus, Ohio-based sector peer L Brands’ issues were mixed.

The 6¾% notes due 2036 added ¼ point to close at 85¾ bid The 5¼% note due 2028, while moving as high as 89¾ bid, ended level at 88 bid, according to Trace data.

Plano, Texas-based department store chain J.C. Penney’s 8 5/8% paper due 2025 gained ¾ point to close at 57 bid.

Tata down

Meanwhile, in the auto space, Tata Motors’ notes fell, a market source said.

The Jaguar Land Rover plc 5 5/8% notes due 2023 dropped 4¼ points to close at 88¾ bid.

The Mumbai, India-based auto manufacturer reported a quarterly loss of $3.9 billion, reportedly the largest in Indian corporate history.

Blame was laid squarely on its Jaguar Land Rover segment and lagging China sales.

The company also warned that it projected an operating loss for Jaguar in the short-term.

Jaguar is said to be considering several financing options.

Adient off

Elsewhere in the automotive space, Adient’s issues continued a negative trend, traders said.

The 4 7/8% notes due 2026 shed 2¼ points to close at 69¼ bid.

The Dublin-based automotive seating manufacturer issued its first-quarter earnings report on Thursday.

It reported a 31 cents per share profit, falling short of analyst expectations of a 48 cents per share profit.

Rowan loses

In the oil and gas space, Rowan’s paper saw a drop, market sources said.

The 4 7/8% paper due 2022 shaved off ¾ point to close at 88 bid.

Friday afternoon, the Houston-based contract driller announced that two proxy adviser names recommended to its shareholders that they vote for its proposed merger with London-based sector peer Ensco.

The companies recently put off holding a shareholder vote after Ensco offered an amended agreement in which Rowan shareholders would receive 2.75 shares of Ensco for every Rowan share owned.

Elsewhere in distressed oil trading, oil future gains did not translate to popular tranches.

Los Angeles-based independent oil and gas producer California Resources’ notes ended the week mixed.

The 6% notes due 2024 were flat at 68 bid. The 8% notes due 2022 declined 3½ points to close at 76 bid.

Houston-based energy logistics name Hi-Crush’s issues slipped.

The 9½% notes due 2026 lost ¼ point to close at 76 bid.

PG&E up

In utilities, PG&E’s paper continued an upward climb, traders said.

The 6.05% paper due 2034 added ¼ point to close at 88 bid.

The gains for the San Francisco-based bankrupt electric utility saw more negative headlines this week after updating its wildfire mitigation plan, which includes the possibility of cutting power to up to 5.4 million customers in the name of wildfire prevention.

The company also said that it has earmarked $2 billion for wildfire prevention.

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