Frontier lower, CBL gains after earnings report; McDermott slips in energy space

By James McCandless

San Antonio, May 1 – First-quarter earnings reports dominated trading in the distressed space on Wednesday.

Frontier Communications Corp.’s notes were lower after the company issued a disappointing earnings report late Tuesday.

Sector peer Intelsat SA’s issues were mixed a day after releasing its earnings numbers.

Meanwhile, real estate investment trust CBL & Associates Properties, Inc.’s paper saw a gain after putting out its quarterly report.

Elsewhere, in energy, McDermott International, Inc.’s notes slid lower on the back of its lagging earnings.

Weatherford International plc’s issues were negative after the company proposed a reverse stock split.

Lower oil futures saw California Resources Corp.’s and Ensco Rowan plc’s paper follow suit.

In connected commerce Diebold Nixdorf, Inc.’s notes extended a negative run after showing dismal earnings.

Shipping name Navios Maritime Holdings Inc.’s issues continued to gain.

Frontier lower

In telecom, Frontier’s notes headed lower in Wednesday activity, traders said.

The 10½% notes due 2022 fell 1¼ points to close at 73¾ bid. The 11% notes due 2025 shaved off ¼ point to close at 66 bid.

The 10½% notes saw $32 million of the bonds on the tape by the close.

After the close on Tuesday, the Norwalk, Conn.-based wireline communications name released its first-quarter earnings report.

The company showed an 18 cents per share loss, worse than the 10 cents per share loss that analysts expected.

“The stock got killed, but that seems like an overreaction,” a trader said. “It could’ve been worse.”

Intelsat mixed

Sector peer Intelsat’s issues were mixed at the end of the session, market sources said.

Intelsat Jackson Holdings SA’s 5½% notes due 2023 picked up ¼ point to close at 90¾ bid. Intelsat (Luxembourg) SA’s 8 1/8% notes due 2023 lost ¼ point to close at 75¼ bid.

On Tuesday morning, the Luxembourg-based satellite operator reported its first-quarter results, showing an 87 cents per share loss after analysts had predicted a 67 cents per share loss.

Revenues were reported at $528.4 million for the quarter.

“A lot of distressed guys are still betting on this one,” a trader said. “We’re still waiting for the government to clarify its C-band position.”

CBL gains

Meanwhile, CBL’s paper followed an upward trend, traders said.

The 5¼% paper due 2023 gained 1½ points to close at 73¼ bid. The 4.6% paper due 2024 rose 2 points to close at 67½ bid.

The retailer-focused real estate investment trust saw heightened activity after it released its first-quarter numbers following the close on Tuesday.

The rise came despite posting a profit of 30 cents per share, just short of the 33 cents per share that analysts expected.

The company’s structure came under pressure in March after announcing that it would be settling a class action lawsuit brought by tenants.

Consequently, it suspended dividend payments for the rest of the year.

McDermott slides

Elsewhere, in energy, McDermott’s notes slid lower, market sources said.

The 10 5/8% notes due 2024 dropped 1¼ points to close at 89 bid.

On Tuesday, the Houston-based oil and gas construction name released lukewarm first-quarter earnings.

The company showed a 2 cents per share profit, lower than the expected 9 cents per share profit.

It had previously warned of impairment charges due to increasing costs in production, highlighting overruns in a Louisiana-based liquid LNG facility earlier in the year.

Revenues were better than expected at $2.2 billion.

Weatherford off

Weatherford, another oil and gas name, saw a negative day for its issues, traders said.

The 8¼% notes due 2023 fell ¾ point to close at 68½ bid. The 9 7/8% notes due 2024 also dropped ¾ point to close at 69 bid.

The Baar, Switzerland-based oilfield services provider announced on Tuesday that it will be proposing a 1-to-20 reverse stock split to its shareholders.

The company received a delisting warning from the New York Stock Exchange after its common stock fell below compliance levels.

The company concurrently announced the completion of two asset sales totaling $256 million.

Oil loses

Popular distressed oil names followed crude oil futures lower, market sources said.

Los Angeles-based independent oil and gas producer California Resources’ paper was pushed lower.

The 8% notes due 2022 gave back 1½ points to close at 76 bid.

London-based contract driller Ensco Rowan’s notes also saw a dip.

The 7¾% notes due 2026 lost ¼ point to close at 86 bid. The 5.2% notes due 2025 fell 1¼ points to close at 79¾ bid.

West Texas Intermediate crude oil futures for June delivery took off 31 cents to finish the session at $63.60 per barrel.

North Sea Brent crude oil futures for June delivery closed at $72.79 per barrel after losing 1 cent.

Diebold negative

Meanwhile, Diebold’s issues extended a negative run, traders said.

The 8½% notes due 2024 slipped 1 point to close at 85¾ bid.

On Tuesday, the notes lost 1¾ points.

The North Canton, Ohio-based connected commerce solutions company disappointed with its earnings report on Tuesday.

The name reported a loss of $1.74 per share, far lower than the expected 35 cents per share loss.

Navios gains

In shipping, Navios’ paper was seen gaining, market sources said.

The 7 3/8% paper due 2022 tacked on 1¼ points to close at 66¼ bid.

On Tuesday, the paper gained 2 points.

The Monaco-based shipping name has remained on a positive swing, though no news has been pegged to it.

“We’re always on the outside looking in when it comes to Navios,” a trader said.

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