California Resources notes mixed on Q3 earnings; American Axle issue plummet post-earnings

By James McCandless

San Antonio, Nov. 2 –At the end of the week’s trading, the distressed space was fixed on third-quarter results.

California Resources Corp.’s notes were mixed in Friday’s session after the company released its third-quarter earnings report after the Thursday close.

Meanwhile, Sanchez Energy Corp. and Hornbeck Offshore Services, Inc.’s issues were positive again after the companies released their earnings early Thursday.

Other offshore services providers Bristow Group Inc. and Weatherford International plc’s paper saw mixed results.

Elsewhere, American Axle & Manufacturing Holdings, Inc.’s notes tanked after the company missed analysts’ earnings predictions and cut its guidance.

In retail, Rite Aid Corp. and Bed Bath & Beyond Inc.’s issues were active

Hexion Inc.’s paper saw a drop, continuing a nine-day negative streak.

California Resources mixed

California Resources’ notes were mixed Friday, traders said.

The 6% notes due 2024 picked up 2 points to close at 83¼ bid. The 8% notes due 2022, while rising 1 point in intraday trading, ended the session level at 90½ bid, according to Trace data.

The Los Angeles-based independent oil and gas producer issued its third-quarter earnings report after the close Thursday, showing an 81 cents per share profit against expectations of an 8 cent loss per share.

The company also beat revenue estimates by reporting revenue of $828 million.

“They’re a bellwether already and the numbers were better than most people expected,” a trader said.

Houston-based peer Sanchez Energy’s issues were trending higher but ended the session level.

The 6 1/8% notes due 2023, while reaching towards 40½ bid during Friday trading, ended flat at 39½ bid.

On Thursday, the 6 1/8% notes gained 2 points after the company reported a loss of 15 cents per share for the third quarter after analysts expected a 12 cents per share loss.

Covington, La.-based offshore services provider Covington’s 5 7/8% paper due 2020 added ½ point to close at 77½ bid.

The company also reported third quarter results, showing a 78 cents per share loss after the close Wednesday.

Houston-based peer Bristow’s 6 ¼% notes due 2022 rose 2 points to close at 75 bid.

Baar, Switzerland-based offshore services name Weatherford’s issues were mixed.

The 7¾% notes due 2021 added ¾ point to close at 81¾ bid. The 8¼% notes due 2023 lost ¾ point to close at 73¼ bid.

Weatherford’s issues have been under pressure since the company reported a 10 cents per share loss and $1.44 billion in revenues for the third quarter on Monday.

“I think the feeling on energy is slightly more positive,” a trader said. “I know oil futures keep getting killed, but some of the supply worries are gone now that some countries still get to buy Iran’s oil.”

American Axle tanks

Elsewhere, American Axle’s paper cratered, market sources said.

The 6¼% paper due 2026 shed 5¼ points to close at 91¼ bid. The 6½% paper due 2027 dropped 4 points to close at 92 bid.

The Detroit-based auto parts manufacturer’s paper was sent lower Friday after reporting earnings of 63 cents per share for the third quarter, well below the 90 cents per share estimate.

“There’s been some rumblings about it from distressed guys for a few weeks,” a trader said. “Those notes could sink lower, especially with their guidance being cut.”

Retail trends up

Meanwhile, in retail, Rite Aid’s notes improved, traders said.

The 7.7% notes due 2027 jumped up 1½ points to close at 70 bid. The 6 1/8% notes due 2023 rose 1½ points to close at 85½ bid.

Union, N.J.-based sector peer Bed Bath & Beyond’s 5.165% bonds due 2044, while rising as high as 71¼ bid, ended Friday level at 70½ bid.

Last week, S&P lowered the company’s issuer credit rating and issue-level rating to BB+ from BBB-.

Hexion drops

Hexion’s issues continued to decline, market sources said.

The 6 5/8% notes due 2020 lost 1¾ points to close at 86½ bid. The 9% notes due 2020 fell 2 points to close at 57½ bid.

The chemical producer’s notes extended a month-long negative streak instigated by reports of noteholders organizing for talks with the company over the $2.4 billion in debt maturing in 2020.

“There’s no telling when it’ll stop being a punching bag,” a trader said.

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