Midday Commentary: Convertibles traders eye earnings; Rambus in focus after earnings jar stock

By Rebecca Melvin

New York, April 22 - Earnings news appears to be the next item of business for convertibles traders, with a shower of releases expected over the next couple of days, as markets continue to gear up following the Easter holiday and spring-break vacations.

Rambus Inc.'s convertibles were in focus after the Los Altos, Calif.-based technology licensing company reported strong first-quarter earnings that beat estimates but tempered its outlook for the current quarter.

The designer of chip interface technologies and architectures reported first-quarter revenue of $78.3 million, which was 17% higher than the year-earlier period and ahead of estimates. But it expects second-quarter results to be hurt by lower royalty revenue.

Rambus shares were down 10% early on but were last 3% higher. The Rambus 1.125% convertibles due 2018 were seen at 124.375 bid, 125.375 offered with the underlying shares at $12.70, a New York-based trader said.

ProLogis also reported first-quarter earnings. The warehouse real estate investment trust's results beat estimates by a penny early Tuesday, while guidance for full-year 2014 was narrowed with funds from operations seen at $1.75 per share to $1.82 per share.

ProLogis shares were down 42 cents, or 1%, at $40.97 in the early going. The ProLogis 3.25% convertibles due 2015, which mature in 11 months and have been somewhat overvalued, weren't seen to have traded but were last around 113.

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