Morning Commentary: American Tower mandatory adds on debut; salesforce.com jumps outright

By Rebecca Melvin

New York, Feb. 26 – American Tower Corp.’s newly priced 5.5% convertible mandatory preferred shares gained in early action on Thursday after the Boston-based communications tower sites company priced $1.25 billion of the stock at a dividend that came through the rich end of talk, market sources said.

The American Tower mandatory was called better by 0.75 point on a dollar-neutral basis, a New York-based trader said.

Also in early action salesforce.com Inc.’s 0.25% convertibles due 2018 jumped about 6.5 points on an outright basis to 122ish as shares surged 11% on positive earnings.

The salesforce.com earnings report was followed by several analysts’ price target upgrades for the enterprise cloud computing company.

San Francisco-based salesforce.com reported a narrowed loss of $65.8 million, or 10 cents a share, for its fourth quarter ended Jan. 31, compared to a loss of $116.6 million, or 19 cents, in the year-earlier period.

Excluding items, the company earned 14 cents per share, which was in line with estimates.

The company also reported $1.44 billion of revenue for the quarter, which was up 5% from the year-earlier period and also in line with estimates.

Looking ahead, the company said it expects to earn 13 cents to 14 cents per share and revenue of $1.485 billion to $1.505 billion for the current quarter, which was a little below expectations for 15 cents per share of profit and $1.5 billion of revenue.

For the full year, the company expects to earn 67 cents to 69 cents per share on revenue of $6.475 billion to $6.520 billion. That is an increase of about 20% and includes a foreign exchange headwind of about $175 million to $200 million.

Deutsche Bank raised its price target to $80.00 per share from $70.00.

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