California Resources, Valaris fall post-earnings; Chemours off in chemical space

By James McCandless

San Antonio, Aug. 2 – The distressed market ended the week with an extension of Thursday’s negativity as more earnings are released.

California Resources Corp.’s notes dropped after the company released its second-quarter earnings report.

Sector peer Valaris plc’s issues were also negative in the wake of its own results.

Despite a jump for oil futures, Whiting Petroleum Corp.’s and Range Resources Corp.’s notes were losing on Friday.

Meanwhile, in chemicals, Chemours Co.’s notes were also trailing after it issued its own earnings report.

Farm machinery maker Titan International, Inc.’s issues continued to drop in reaction to poor earnings.

In telecom, Intelsat SA and Frontier Communications Corp.’s paper diverged.

Drug maker Teva Pharmaceutical Industries Ltd.’s notes declined.

CalRes drops

Oil name California Resources’ notes dropped during the day, traders said.

The 6% senior notes due 2024 lost 5 points to close at 48 bid. The 8% notes due 2022 declined 1 point to close at 65 bid.

After the close on Thursday, the Los Angeles-based independent oil and gas producer released its second-quarter earnings.

The company reported a loss of 29 cents per share, worse than what analysts expected at a 28 cents per share loss.

Revenues were listed at $653 million, also missing analyst’s marks.

The name’s tranches have long been considered a bellwether for distressed energy.

“There’s a bit of a crunch going on right now,” a trader said. “These energy names are under a lot of pressure to become leaner and start increasing their margins.”

Valaris off

Sector peer Valaris’ issues were also negative, market sources said.

The Rowan Cos. Inc. 4 7/8% senior notes due 2022 lost 4 points to close at 88 bid. The Rowan Cos. Inc. 4¾% notes due 2024 sunk 5¾ points to close at 70 bid.

The London-based contract driller, formerly known as Ensco Rowan, put out its second-quarter earnings report this week.

An earnings loss was shown at $1.32 per share, slightly wider than the $1.30 loss per share that analysts predicted.

It also underperformed on revenues, showing $583.9 million.

“That drilling sector recovery is going slower than expected,” a trader said.

Oil names lose

As oil futures improved, some distressed energy names worked their way down, traders said.

Denver-based independent producer Whiting Petroleum’s paper was negative.

The 6 5/8% senior paper due 2026 slid ¾ point to close at 85¾ bid.

On Wednesday, the company announced that it lost 28 cents per share during the second quarter and would be cutting one-third of its workforce.

Fort Worth-based peer Range Resources’ notes were also under water.

The 4 7/8% senior notes due 2025 dropped ½ point to close at 82 bid.

West Texas Intermediate crude oil futures for September delivery jumped up $1.71 to finish the week at $55.66 per barrel.

North Sea Brent crude oil futures for October delivery ended at $61.89 per barrel after a $1.39 improvement.

Chemours down

Elsewhere, Chemours’ issues were trailing on Friday, market sources said.

The 5 3/8% senior notes due 2027 lost 3¼ points to close at 85½ bid.

After the Thursday close, the Wilmington, Del.-based chemicals producer was another name releasing second-quarter earnings.

While posting a profit of 72 cents per share, the results failed to match analyst predictions of 90 cents per share.

Revenues were listed at $711 million.

The company placed the blame on softer-than-expected demand and other problems in the titanium dioxide market, one of its core segments.

The 5 3/8% notes are trading at their lowest levels since their issuance, according to market data.

Titan falls

Titan International paper extended a downward push, traders said.

The 6½% senior secured paper due 2023 lopped off another 4½ points to close at 81¼ bid.

On Thursday, the 6½% paper dropped 4¼ points.

The paper’s slide was spurred after the Quincy, Ill.-based agricultural machinery maker reported its second-quarter earnings.

Earnings were shown at a 12 cents per share loss and revenues were $390.6 million.

The company has been fighting low commodity prices and a slump in demand for the past year, exemplified in a string of recent disappointing quarterly results.

Intelsat, Frontier diverge

Telecom name Intelsat’s notes moved in varying directions, market sources said.

Intelsat Jackson Holdings SA’s 5½% senior notes due 2023 added ¼ point to close at 92 bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 shaved off ¾ point to close at 80¼ bid.

This week, the Luxembourg-based satellite operator showed a $1.05 per share loss for the second quarter.

Revenues were listed at $509.41 million.

Norwalk, Conn.-based wireline communications name Frontier’s issues showed similar movements.

The 10½% senior notes due 2022 fell ½ point to close at 60¼ bid. The 11% notes due 2025 picked up ½ point to close at 56¾ bid.

Teva declines

In the pharma space, Teva’s paper finished the week declining, traders said.

The 3.15% senior paper due 2026 slid 1½ points to close at 77 bid. The 4.1% paper due 2046 lost ¼ point to close at 67 bid.

Recently, the Petach Tikva, Israel-based generic drug maker agreed to a $69 million settlement with California after being accused of being paid to delay the release of generic versions of popular medications.

The company has come under continual negative scrutiny as its sector works through legal disputes over the opioid epidemic and other issues.

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