ADM contracts a point; D.R. Horton active, higher; Ford adds on higher sales; AMD steady

By Rebecca Melvin

New York, Feb. 2 - Archer-Daniels-Midland Co. bonds traded actively and came in about 1 point on Tuesday based on a rise in their underlying shares after the Decatur, Ill.-based agribusiness company reported lower earnings that beat estimates.

D.R. Horton Inc. jumped in active trade after data showed pending home sales rose and after the Fort Worth-based homebuilder reported its first quarterly profit in several years.

The National Association of Realtors said that its seasonally adjusted index of contracts signed rose 1% from November to December after a 16.4% decline the month prior.

Ford Motor Co.'s newer 4.25% convertibles were quoted actively, with no definable trade, according to a West Coast-based sellsider, after the Dearborn, Mich.-based automaker posted a 25% increase in January sales - a percentage gain that outpaced its competitors.

Advanced Micro Devices Inc. was stable, and not really active, as its shares weakened after Goldman Sachs added the company to its conviction sell list. There are buyers, though, for the convertible paper, a sellsider said.

Meanwhile, Leap Wireless International Inc. saw good two-way action in its convertibles after reports emerged Monday that the San Diego-based cellular service provider has hired advisors and formed a special board committee to weigh a possible merger or sale.

Leap Wireless' 4.5% convertibles due 2014 traded at 87.25 outright on Tuesday.

ADM contracts a point

ADM's 0.875% convertible notes due 2014 traded at 103 versus a share price of $31.31 and also at 102.5 versus a share price of $30.50 on Tuesday, compared to 102 versus a share price of $29.90 on Monday and compared to 104.5 versus a share price of $32.40 at the end of the year.

ADM's newer 6.25% mandatory convertibles were at 43.50 versus a share price of $30.15 earlier in the day, according to a New York-based sellside desk analyst.

Shares of ADM gained $1.46, or 4.8%, to $31.62 on Tuesday.

Early Tuesday, the company, which converts corn, oilseeds, wheat and cocoa into products for food, animal feed, chemical and energy uses, said that it earned $567 million, or $0.88 per share, on sales of $15.9 billion for the quarter ended Dec. 31. Its fiscal second-quarter result was down 2% from the same quarter a year ago, according to the company's release. But it beat estimates for earnings per share of $0.72 a share.

Net sales were down from $578 million, or 90 cents a share, a year earlier. The latest period included $89 million in other income, which includes investment gains and equity in earnings of unconsolidated affiliates, compared to the prior year that included $58 million in other expenses.

Revenue decreased 4.6% as higher sales volumes and foreign-exchange were more than offset by lower average selling prices because of reduced commodities costs.

Net sales missed expectations, with increased sales volumes offset by lower average selling prices, resulting primarily from year-over-year decreases in underlying commodity costs. The result missed estimates, which was for sales of $16.54 billion.

Average selling prices decreased in line with year-over-year declines in underlying commodity costs.

DR Horton active, higher

D.R. Horton's 2% convertible senior notes due 2014 traded at 120.125 versus a share price of $13.10 and also at 120.75 versus a share price of $13.20 on Tuesday. Those levels were higher by about 7 points outright.

Shares of the Fort Worth-based homebuilder surged $1.30, or 11%, to $13.21 on Tuesday.

The company was the first among its sector to post a profit, and the results beat estimates.

Net income for the quarter ended in December was $192 million, or 56 cents a share, aided by a tax benefit of $149.2 million, compared with a loss of $62 million, or 20 cents a share, a year earlier.

The recent profit came on revenue of $1.1 billion. Analysts had expected a loss of 13 cents a share on revenue of $960 million.

The company benefited from the federal government's first-time home buyers' tax credit because of its new focus on affordable housing.

Ford about 2 points higher

Ford's newly priced 4.25% convertibles due 2014 traded at 138.26 versus a share price of $11.28 on Tuesday, compared to 136.25 versus a share price of $11.10 on Monday.

The paper was said to be actively quoted.

The Dearborn, Mich.-based automaker saw its shares gain 27 cents, or 2.4%, to $11.39 on Tuesday.

Ford posted a 25% increase in January sales, which has two fewer sales days than last year.

Ford's U.S. company-wide light-vehicle sales were 116,277, compared with 93,041 a year earlier.

Ford, Lincoln and Mercury car sales rose 43%, while crossovers increased 20% and sport-utility vehicles rose 8.2%. Truck and van sales jumped 14%.

Meanwhile, General Motors Co. reported retail sales grew 3% to 102,420 with total light-vehicle sales rising to 146,315. Chrysler reported an 8% decline to 57,143.

AMD mostly steady, quiet

AMD's 6% convertibles due 2015 traded at 92.5 and also at 92 in quiet trade, which was steady to 0.5 point lower on the day.

A Connecticut-based sellsider said the AMD 6% bonds were "stable and not really active at all." And a West Coast-based sellside trader said there "are definitely buyers around."

Goldman Sachs put the company on its conviction sell list, with its analysts saying they expect the company will continue to suffer sizable losses in 2010.

Mentioned in this article:

Advanced Micro Devices Inc. NYSE: AMD

Archer-Daniels-Midland Co. NYSE: ADM

D.R. Horton Inc. NYSE: DHI

Ford Motor Co. NYSE: F

Leap Wireless International Inc. Nasdaq: LEAP

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