NXP moves down in active trade; Euronet slips post-earnings; ServiceNow drops outright

By Rebecca Melvin

New York, Oct. 23 – Earnings news prompted much of the trading action in the convertibles market on Wednesday. But the top-volume issue in trade was NXP Semiconductors NV’s 1% convertibles, and that company won’t report earnings until next week.

The NXP convertibles, which mature on Dec. 1, slipped to 103.9 from 104.4 in afternoon trading, with shares of the chipmaker closing at $103.21, which was off 4% on the day. The shares closed down from $107.78 on Tuesday and from about $109 on Monday.

The chipmaker is expected to post third-quarter earnings of $1.94 per share in its upcoming report, which represents a decline of 3.5% from the year-earlier period. Revenue is expected to be $2.24 billion, down 8.3% from the year-ago quarter.

According to Trace data, about $26.9 million of the NXP bonds traded on Wednesday.

Several convertibles that traded actively on earnings were lower outright with shares. Euronet Worldwide Inc.’s 0.75% convertible notes due 2049 were active after the payments company reported quarterly results in which earnings beat estimates but revenue missed expectations.

Euronet shares were down 5% in early trading but retraced some of that loss to finish the session down $4.79, or 3%, at $139.17. The bonds traded at both 113.845 and 114.48, according to Trace data. More than $25.6 million of the bonds were on the tape at the end of the session.

ServiceNow Inc.’s convertibles were lower outright in active trading after the enterprise software company announced that its chief executive is leaving the company and that full-year subscription revenue is expected to fall short of the consensus estimate.

The news was part of ServiceNow’s preliminary third-quarter earnings report and guidance update released after the market close on Tuesday. Shares plunged as much as 15% late Tuesday.

On Wednesday, the ServiceNow 0% convertibles due 2022 were seen at 12.3 versus an underlying share price of $210.00. The bond also traded at 167, which was down from pricing in the low-180 range, according to Trace data. The stock was down $7.30, or 3%, at $211.04 in the early going.

On a dollar-neutral basis, the convertibles were seen to have improved by 0.5 point to 0.625 point on the day, according to market sources.

“With the stock trading down from $228 to $210 – to as low as $192 post market – the NOW bonds are the most active,” a New York-based trader said.

ServiceNow chief executive officer John Donahoe is leaving to be CEO of Nike Inc. He is being replaced by Bill McDermott, who is shifting over to take the helm after leaving SAP earlier this month, according to reports.

The company’s reported revenue of $885.8 million for the quarter was in line with estimates. But its full-year subscription revenue of $3.24 billion to $3.245 billion is below the $3.253 billion FactSet consensus estimate.

ServiceNow shares closed down 3.6% at $220.01, but popped in after-hours trade by 6.8%.

Snap Inc.’s convertibles traded actively again on Wednesday and moved lower against a 5.9% drop to $13.18 in the underlying shares. Snap’s 0.75% convertibles due 2026 traded down to 96.38 and ended the session at 96.425. That was down 2.2 points on the day.

The social media company’s third-quarter earnings report beat expectations but guided toward a weaker fourth quarter, sending shares lower in after-hours action after the market close. That prompted $20.5 million of bonds to trade on Tuesday and $19.5 million of bonds to trade on Wednesday.

Mentioned in this article:

Euronet Worldwide Inc. Nasdaq: EEFT

NXP Semiconductors NV Nasdaq; NXPI

ServiceNow Inc. NYSE: NOW

Snap Inc. Nasdaq: SNAP

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.