Intelsat improves after morning earnings release; Frontier mixed, earnings released after market close

By James McCandless

San Antonio, July 30 – Trading in the distressed debt market trended upward on Tuesday as the market entered the thick of earnings season.

Intelsat SA notes rose after the company released its Q2 earnings report Tuesday morning with mixed results.

Frontier Communications Corp. issues were mixed during the day as the company posted its Q2 earnings report after market close.

FirstEnergy Solutions Corp. paper jumped up in anticipation of its parent company’s after-market earnings report.

American Tire Distributors notes declined, ending a four-day positive streak as the company commences talks with bondholders.

Community Health Systems, Inc. issues fell. The company released its Q2 earnings report, beating analyst expectations.

Murray Energy Corp. paper dipped. CEO Robert Murray recently called on the federal government to increase protections for the coal industry.

Intelsat up

Luxembourg-based satellite communications company Intelsat notes gained, traders confirmed, after the company posted its Q2 earnings report on Tuesday morning. It reported a 38 cent loss per share against analyst estimates of 37 cents per share and posted higher than expected revenues of $537.71 million.

“They were trading a lot today,” a trader said. “But the report is really a mixed bag.”

Recently, the Federal Communications Commission announced that it is considering a rule change that would allow mobile providers to access airwaves that are normally restricted to traditional broadcasters. The change could benefit satellite firms that manage those airwaves.

The Intelsat (Luxembourg) SA 7¾% notes due 2021 added ¼ point to close at 95½ bid. The 8 1/8% notes due 2023 rose ½ point to close at 85½ bid.

On Monday, the 7¾% notes gained ¼ point and the 8 1/8% notes lost about ¼ point.

Frontier mixed

Elsewhere in distressed telecom, Norwalk, Conn.-based wireline communications name Frontier Communications issues ended mixed, market sources confirmed, as the company released its Q2 earnings report after the market close Tuesday. The company missed analyst expectations of a 72 cents per share loss by reporting an 80 cents per share loss. It also reported a net loss of $18 million.

CFO Perley McBride recently announced his intention to resign from his post.

The 7 5/8% notes due 2024 picked up about ¼ point to close at around 67¾ bid. The 10½% notes due 2022 were level at 90½ bid. The 11% notes due 2025 rose about ¼ point to close at 81 bid.

On Monday, the 7 5/8% fell about 1 point, the 10½% notes rose about ¾ point and the 11% notes lost about ¼ point.

FirstEnergy improves

FirstEnergy Solutions, a subsidiary of Akron, Ohio-based electricity producer FirstEnergy Corp., saw paper rise in anticipation of its parent company’s Q2 earnings report posted after market close, traders confirmed. The company missed analyst expectations of earnings at 53 cents per share with 28 cents per share. Revenue was reported as $2.7 billion.

The 6.05% paper due 2021 rose about 2 ½ points to close at 59 bid. The 6.8% bonds due 2039 gained about 1 point to close at around 59 bid. The 6.85% bonds due 2034 jumped up 3¾ points to close at 59 bid.

Volume names trade

Huntersville, N.C.-based tire distributor American Tire notes slipped, ending a four-day positive streak. The company is currently in talks with bondholders as it tries to recoup business losses after losing distribution deals with Bridgestone and Goodyear.

The 10¼% notes due 2022 lost ¾ point to close at 41¼ bid.

On Monday, the 10¼% notes gained about 3 points.

Franklin, Tenn.-based hospital operator Community Health Systems issues declined. On Monday, the company released a better than expected earnings report, posting a 1 cent loss per share and $3.56 billion in net operating revenues.

The 7 1/8% notes due 2020 lost about ½ point to close at around 88½ bid. The 6 7/8% notes due 2022 shaved off about ¼ point to close at 48¾ bid.

On Monday, the 7 1/8% notes rose about 2 points and the 6 7/8% notes were level.

St. Clairsville, Ohio-based coal producer Murray Energy paper fell. Chief executive officer Robert Murray has said recently that the federal government needs to strengthen coal industry protections.

The 11¼% paper due 2021 shed 4¾ points to close at 69¼ bid.

“We definitely saw some stronger volume today,” a trader said. “That’s probably going to continue as we work our way through earnings season.”

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