Morning Commentary: Stone Energy steady as shares fall; Xilinx hit after earnings; Knowles on tap

By Rebecca Melvin

New York, April 28 – Convertibles players were focused on energy names and the earnings reports of sundry issuers in various sectors.

Stone Energy Corp.’s 1.75% convertibles due 2017 traded at 32, which was within the 6-point range that the bonds have been bouncing around in in recent days. Shares of the Lafayette, La.-based oil and gas company peeled back to about $1.10 from Wednesday’s recent high mark of $1.26.

Chesapeake Energy Corp.’s 2.25% convertibles due 2038 were definitely higher, trading at 65 in the early going on Thursday, compared to 54 to 62 on Wednesday. Shares of the Oklahoma City-based oil and gas company were flat at about $7.14.

Xilinx Inc.’s 2.625% convertibles dropped sharply in heavy volume after the San Jose, Calif.-based chipmaker beat estimates on quarterly earnings but disappointed investors with its outlook.

The Xilinx bonds were down 12 points to 150, according to Trace data. Shares were down $4.00, or 8%, at $43.46

Xilinx expects revenues to be flat at $571 million, which is lower than consensus estimate of $575 million.

Elsewhere, Allergan plc’s mandatory convertible preferreds were seen flat to better at 82ish, with shares of the Dublin-based specialty pharmaceutical company also little changed at about $220.00.

No color was yet forthcoming on Knowles Corp.’s planned $125 million of 5.5-year convertible senior notes expected to price after the market close. The new paper was talked with a 3% coupon and a 30% premium at the midpoint of talk. Knowles shares were down 5.5% in the early going at $14.19.

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