>>> Parker Drilling Falls on Common Stock, Convertible Offerings

Parker Drilling Falls on Common Stock, Convertible Offerings
Parker Drilling offering 12m common shares, $50m convertible preferred stock via Barclays.
  • Proceeds intended for general corporate purposes, including working capital, capex, acquisitions or the repayment, redemption or refinancing of a portion of its debt
  • PKD down 6.4% post-mkt (vol. 15k)

>>> Asian Update

Asia Mid-Session Market Update: China property prices stabilize further; Aussie construction data unexpectedly declines

***US Session Highlights***
- (IR) Iran's Supreme Leader Ayatollah Ali Khamenei said to denounce the reconciliation plans with Israel and urge resistance to liberate the Palestinian territories
- OPEC Sec Gen Barkindo: Jan compliance was over 90%; looking to do better in coming months; compliance committee to meet on Wed, Feb 22nd; could issue statement afterwards
- (US) Fed's Kashkari: Fed has the unstated third mandate of financial stability; Difficult to see how the math would work on boosting US economic growth to 4%
- (US) FEB PRELIMINARY MARKIT MANUFACTURING PMI: 54.3 V 55.3E
- (US) Trump admin said to be readying executive action to lift coal mining ban on federal lands - press

***US markets on close: Dow +0.6%, S&P500 +0.6%, Nasdaq +0.5%***
- Best Sector in S&P500: Real Estate
- Worst Sector in S&P500: Materials
- Biggest gainers: SNI +7.2%, MDLZ +5.8%, FSLR +5.1%, SJM +4.4%, CNC +4.0%
- Biggest losers: FCX -5.2%, TSN -3.0%, GPC -3.0%, RRC -2.7%, VRTX -2.0%
- At the close: VIX 11.6 (+0.1pts); Treasuries: 2-yr 1.24% (+1bps), 10-yr 2.43% (flat), 30-yr 3.04% (+1bps)

***US movers afterhours***
- DEPO: Reports Q4 $0.48 v $0.32e, R$124M v $123Me; +6.5% afterhours
- XPO: Reports Q4 $0.24 v $0.20e, R$3.68B v $3.68Be; +3.7% afterhours
- RRGB Reports Q4 $0.35 v $0.29e, R$291.5M v $298Me; Guides initial FY17 EPS $2.70-3.00 v $2.96e; +3.2% afterhours
- AWK: Reports Q4 $0.57 v $0.56e, R$802M v $811Me; +1.8% afterhours
- FSLR: Reports Q4 $1.24 v $0.97e, R$480M v $392Me; +1.3% afterhours

- GBT: To sell $75M in common stock (7% of market cap); -9.7% afterhours
- FUEL: Reports Q4 -$0.09 adj v $0.10e, R$124.8M v $122Me (1 est); -9.8% afterhours
- TXRH: Reports Q4 $0.29 v $0.37e, R$484.7M v $497Me; raises dividend to $0.21 from $0.19 (implied 1.8% yield); -10.4% afterhours
- PKD: Offers 12M shares of Common Stock (9.5% of shares outstanding) and Series A Mandatory Convertible Preferred Stock; -12.8% afterhours
- SREV: Reports Q4 $0.02 v $0.03e, R$68.7M v $69.6Me; Guides Q1 R$55-58M v $62.5Me; -22.2% afterhours

***Asia Key economic data:***
- (CN) CHINA JAN PROPERTY PRICES M/M: RISE IN 45 OUT OF 70 CITIES VS 46 PRIOR; Y/Y: RISE IN 66 OUT OF 70 CITIES V 65 PRIOR
- (AU) AUSTRALIA Q4 CONSTRUCTION WORK DONE Q/Q: -0.2% V +0.5%E; 6th straight quarter of decline
- (AU) AUSTRALIA Q4 WAGE PRICE INDEX Q/Q: 0.5% V 0.5%E; Y/Y: 1.9% V 1.9%E
- (AU) AUSTRALIA JAN SKILLED VACANCIES M/M: 1.0% V 1.4% PRIOR
- (AU) AUSTRALIA JAN WESTPAC LEADING INDEX M/M: 0.0% V 0.4% PRIOR
- (NZ) NEW ZEALAND JAN CREDIT CARD SPENDING M/M: 0.2% V 3.2% PRIOR; Y/Y: 7.1% V 8.6% PRIOR
- (MY) Malaysia Jan CPI y/y: 3.2% v 2.7%e

***Asia Session Notable Observations, Speakers and Press***
- Asian equity markets are mixed amid muted volatility in spite of all US indices hitting fresh record highs after a 3-day weekend. Investors still await FOMC policy meeting minutes for cues on policy bias as they calibrate expectations for a tightening next month. During US hours, Fed's Harker reiterated the consideration of March tightening should be on the table, while comments from Fed's Mester during Asia session noted US being at full employment and inflation expectations moving higher. Probability of the March move is still below 20, though the odds for a 25bp move by May has risen to about 45%.
- In FX, USD was under the most pressure against JPY and GBP - USD/JPY fell to session lows in the wake of BOJ Gov Kuroda stating oil prices have likely stopped weighing on CPI, potentially diminishing the need for bolder easing. GBP/USD saw more pronounced gains above $1.25 after reports that the Brexit law passed the reading in the upper house of parliament without a vote.
- China developer names traded mixed and little changed after the latest property prices showed continued trend of moderating. Prices rose in 45 out of 70 cities v 46 in prior month, while avg price growth across the top cities slowed to 0.2% v 0.3% prior m/m and 12.2% v 12.4% prior y/y. China Stats Bureau said that data shows home prices stabilizing in lower tier cities and outright falling sequentially in top-tier cities.
- In Australia, Q4 construction work volume surprisingly contracted for the 6th straight quarter against expectation of a rise, though the decline was dominated by the Engineering component as others (Building, Residential, and non-Residential) were all positive. Some economists have already revised their expectations for Q4 growth based on the construction drop. Among notable earnings, Woolworths rose over 4% despite missing expectations after completing writedowns on home improvement unit, Fortescue fell over 2% on profit-taking despite the strong growth in profits, and Woodside Petroleum was up a marginal 0.1%.


China:
- (CN) NBS: China home prices have stabilized
- (CN) According to Nielsen, China Consumer Confidence in Q4 rose 2pts from Q3 to 108 - Shanghai Daily

Japan:
- (JP) Bank of Japan (BOJ) Gov Kuroda: More easing possible if needed to reach price target, but chances are small for a further negative rate cut
- (JP) Japan Fin Min Aso: no plan to issue negative yield JGB at this time

Australia/New Zealand:
- (AU) JPMorgan lowers Australia Q4 GDP forecast to 0.7% from 0.9% following latest construction data
- (AU) RBA Gov Lowe: Reiterates Australia growth expectations of about 3% GDP for next 2 years and gradual rise in inflation; Debt levels are impacting
- (NZ) AgriHQ dairy analyst: Today's decline in Dairy Trade Auction is a short term reaction to balanced market - NZ press

***Asian Equity Indices/Futures (00:00ET)***
- Nikkei -0.1%, Hang Seng +0.8%, Shanghai Composite -0.2%, ASX200 +0.2%, Kospi +0.1%
- Equity Futures: S&P500 +0.1%; Nasdaq +0.1%; Dax +0.1%; FTSE100 flat

***FX ranges/Commodities/Fixed Income (00:00ET)***
- EUR 1.0530-1.0555; JPY 113.35-113.70; AUD 0.7665-0.7697; NZD 0.7155-0.7175
- Apr Gold -0.2% at $1,237/oz; Apr Crude Oil +0.3% at $54.48/brl; Mar Copper -0.2% at $2.74/lb
- (NZ) Fonterra Global Dairy Trade Auction: Dairy Trade price index: -3.2% v +1.3% prior (biggest decline since Jan 3rd)
- SLV: iShares Silver Trust ETF daily holdings rise to 10,428 tonnes from 10,410 tonnes prior; first rise since Jan 27th
- USD/CNY: (CN) PBOC SETS YUAN MID POINT AT 6.8830 V 6.8790 PRIOR; 3rd straight weaker setting
- (CN) PBOC to inject combined CNY120B v CNY100B prior in 7-day, 14-day and 28-day reverse repos
- (AU) Australia sells A$11.0B in 2028 2.75% bonds; avg yield 3.005% (largest sale on record)

***Asia equities / Notables / movers by sector***
- Consumer discretionary: FXJ.AU Fairfax Media +8.6% (H1 result); APE.AU AP Eagers +1.3% (FY16 result); TGR.AU Tassal Group +5.2% (H1 result); CCL.AU Coca-Cola Amatil +5.7% (FY16 result); BGA.AU Bega Cheese +3.9% (H1 result)
- Consumer Staple: WOW.AU Woolworths +4.4% (H1 result)
- Financials: 1862.HK Jingrui Holdings +1.7% (profit warning); 1036.HK Vanke Property (Overseas) -0.8% (FY16 result); MNY.AU Money3 Corp -1.4% (H1 result); MMS.AU McMillan Shakespeare +8.3% (H1 result)
- Industrials: FBU.NZ Fletcher Building Limited -5.2% (H1 result); QUB.AU Qube Holdings -0.6% (H1 result)
- Technology: 6502.JP Toshiba Corporation +18.4% (said to raise expectations for chip unit sale); ISD.AU iSentia Group -34.9% (H1 result); WTC.AU Wise Tech +9.4% (H1 result); AGI.AU Ainsworth Game Technology +2.2% (H1 result)
- Materials: FMG.AU Fortescue Metals Group -2.8% (H1 result); BHP.AU BHP Billiton -0.6% (H1 result)
- Energy: 135.HK Kunlun Energy -0.6% (profit warning); WPL.AU Woodside Petroleum +0.1% (FY16 result)
- Healthcare: BKL.AU Blackmores -10.4% (H1 result); IFN.AU Infigen Energy -1.8% (H1 result); HSO.AU Healthscope +5.6% (H1 result)
- Telecom: SLC.AU Superloop +6.6% (signs contract)

>>> US After Hours Summary: WMGI +5%, DEPO +5%, RRGB +3%, FSLR +2% fo


After Hours Summary: WMGI +5%, DEPO +5%, RRGB +3%, FSLR +2% following earnings/guidance, NVDQ +25% continued strength following Cigna coverage news... SREV -25%, TXRH -10%, WLL -4.2% following earnings/guidance

After Hours Gainers:

Companies trading higher in after hours in reaction to earnings/guidance: LNTH +7% (also the company and GE Healthcare sign a a term sheet relating to the continued Phase III development and worldwide commercialization of flurpiridaz F18), WMGI +5.4%, DEPO +4.6%, DL +4.3%, XPO +3.7%, SRT +3.4%, RRGB +3.3%, HCLP +3.2% (light volume), VMI +2.2%, EXR +2% (ticking higher), FSLR +1.8% (also secures syndicated financing arranged by Mizuho Bank for utility-scale solar project in Japan), UVE +1.7%, LZB +1.4%, WCN +1.1%

Companies trading higher in after hours in reaction to news: NVDQ +25.3% (continued strength after confirming Cigna now covers Dermacell for breast reconstruction surgery and Dermacell AWM for diabetic foot ulcers), TRCO +3% (Starboard Value discloses 6.6% active stake)

After Hours Losers:

Companies trading lower in after hours in reaction to earnings/guidance: SREV -24.8%, TXRH -10.1%, FUEL -9.8%, DAC -7.4% (ticking lower), WLL -4.2%, PZZA -3.5%, FE -2.9%, KAR -2.5%, NEM -2.1% (also reports gold reserves of 68.5 mln oz for 2016 vs 71.1 mln oz in 2015; provides FY17 capex guidance), SAND -1.7% (light volume), NFX -1.2%

Companies trading lower in after hours in reaction to news: PKD -10.6% (commences 12 mln common stock offering and $50 mln public offering of Series A Mandatory Convertible Preferred Stock), GBT -10% (to sell $75 mln in shares of its common stock in a registered underwritten public offering), AGEN -6.2% (discloses that the Alliance for Clinical Trials in Oncology's Data and Safety Monitoring Board interim analysis for futility of the Phase II trial of Prophage G-200 vaccine in combination with bevacizumab suggested that the trial is unlikely to demonstrate that the vaccine will lead to a better survival than bevacizumab as a monotherapy), TLLP -2.5% (commences 5 mln common units offering), YUM -2% (following block trade pricing), CUZ -1.5% (commences public offering of 63,571,336 shares of its common stock -  includes 25 mln shares offered by the company)

WSJ : Carl Icahn Takes Stake in Bristol-Myers Squibb

Carl Icahn Takes Stake in Bristol-Myers Squibb
Sources say activist investor sees value in drugmaker’s pipeline

Carl Icahn has taken a stake in Bristol-Myers Squibb Co., making him the second big activist to pressure the company following disappointment in its cancer-treatment efforts.

Mr. Icahn owns a large stake and believes the New York drug giant has a good pipeline that would help make it an attractive takeover target, people familiar with the matter said. It isn’t clear how big the stake is.

On Tuesday, Bristol-Myers announced it would add three directors to its board and buy back $2 billion in stock in a pact with another activist, Jana Partners LLC.

Jana took a stake last year and began pushing for board changes after Bristol-Myers announced in January that a lung-cancer treatment wouldn’t get approval as fast as hoped, according to a person familiar with the matter. That warning increased investor fears Bristol-Myers would lose out to rivals in a crucial treatment sphere and contributed to a roughly 30% decline in the stock since July. The shares had fallen by nearly 2% Tuesday afternoon to $53.55 following news of the settlement with Jana. The drug company’s market value now stands at about $90 billion.

Mr. Icahn has a history of successfully pushing for deals among pharmaceutical companies, and his presence on Bristol-Myers’ shareholder register will likely add to recent speculation that a bidder could swoop in following the stock decline. Such a possibility has helped boost Bristol-Myers shares somewhat since January.

The famed investor, who just turned 81, has a history with Bristol-Myers. In 2008, he was a large shareholder in ImClone Systems Inc. and helped rebuff Bristol-Myers’ attempt to buy the company, its partner on an important cancer drug, for $4.7 billion. Instead, Mr. Icahn supported Eli Lilly & Co. when it swooped in to buy ImClone for $6.5 billion.

In 2012, Mr. Icahn took a stake in Amylin Pharmaceuticals Inc. and called on the company to explore a sale after it had rebuffed a bid from Bristol-Myers. After the diabetes-treatment maker ran a sales process, it agreed to a higher bid, valued at $5.3 billion, from Bristol-Myers.

Bristol-Myers pioneered cancer immunotherapy, which aims to fight the disease using the body’s immune system, but its recent missteps had critics wondering if it would be surpassed by competitors like Merck & Co. Management has sought to reassure investors that its immunotherapy treatments have a bright future.

On Tuesday, Bristol-Myers said it recruited former senior executives from Bausch & Lomb Inc. and Vertex Pharmaceuticals Inc.—Robert Bertolini and Matthew Emmens, respectively—to its board, effective immediately, along with Theodore Samuels, who currently sits on the boards Perrigo Company PLC and Stamps.com.


The Bristol-Myers board will be temporarily expanded to 14 seats, but only 11 directors will stand for election at the company’s annual meeting in May. Current Chairman Lamberto Andreotti will retire, as previously announced.

WSJ : Mining Companies Are Back in the Black

Mining Companies Are Back in the Black
Coming out of a punishing downturn, executives are still cautious despite the return to profitability

The world’s biggest miners are profit machines again, cashing in on soaring commodity prices and rewarding investors who stuck with them through a brutal downturn.

BHP Billiton Ltd., the world’s largest miner by market value, said Tuesday it had a profit of $3.2 billion for the second half of 2016 after posting a $5.7 billion loss in the year-earlier period. Anglo American PLC, the fifth-largest mining company, reported a profit of $1.6 billion for all of 2016, a dramatic rebound from 2015, when it lost $5.6 billion.

The solid performance builds on strong results from British-Australian miner Rio Tinto PLC, which two weeks ago said it earned $4.6 billion in 2016 following a loss of $866 million in the prior year. Switzerland-based Glencore PLC is scheduled to release 2016 results on Thursday, with analysts widely predicting a return to profit.

The swift return to profitability for the world’s mining giants has surprised analysts, investors and executives alike. Few had predicted sustained rallies in everything from iron ore to coal to copper last year.

Global mining companies are in better shape now than they were two years ago, when a steep decline in commodity prices sent their shares reeling, analysts say. To bolster their health, they sold off underperforming mines, shrank workforces and paid down massive piles of debt.

Glencore scrambled to sell $4.7 billion in assets in the past year, including an Australian rail business and a 49.9% stake in its agriculture business. The company raised $1.4 billion from selling future deliveries of gold and silver from a pair of mines in Peru.

The sales, along with eliminating its dividend and issuing new stock, helped Glencore survive a scary dive in its share price as investors rebelled over its debt levels. The company has said its net debt would fall to $17.5 billion or less by the end of 2016, from $29.7 billion as of June 30, 2015.

Anglo American last April agreed to sell its Brazilian niobium and phosphates business to China Molybdenum Co. for $1.5 billion—part of a downsizing plan the company described as “radical.” The miner had expected to unload more operations, but a rebound in coal and iron-ore prices made it more attractive to keep those assets.

Anglo American also benefited from solid sales of diamonds from its De Beers Group business, which was boosted by U.S. demand. The U.K.-based firm cut its net debt to $8.5 billion at the end of 2016 from $12.9 billion a year earlier.

BHP’s net debt at year-end stood at $20.1 billion, down from $26.1 billion at midyear. Rio Tinto last year slashed net debt by 30% from the previous year to less than $10 billion.

“They’re as lean as can be,” said Campbell Parry, an analyst with Abax Investments, referring to the mining companies. The Cape Town, South Africa, investment firm owns shares of Anglo American and BHP.


Leaner balance sheets should give the companies “a lot more agility than they had a few years ago,” Mr. Parry said.

Rising copper prices have helped the miners. Glencore, Anglo American, BHP and Rio are among the world’s biggest producers of the metal, whose price rose 27% in 2016. Copper has continued rising in 2017; it is up nearly 10% as work stoppages in Chile and permit disputes in Indonesia contribute to supply concerns.

Now that the miners have dug themselves out of a hole, the question is whether they can keep from sliding back in, analysts say. Mining executives, burned by the downturn, remain cautious.

They have chosen to use the surge in profits largely to reward investors, not launch big new projects. Rio increased its dividend and announced a $500 million share buyback. BHP doubled its dividend. Anglo says it plans to pay dividends on 2017 profits after eliminating its dividend last year.

Although profits are back, they remain far below the dizzying heights reached in years like 2011, when BHP recorded over $23 billion in profit amid a China-fueled boom in commodity prices.

Mining executives are particularly wary that coal and iron-ore prices, which surged last year amid renewed demand in China and reduced Chinese production, have risen too far too fast.

“I have to say, we don’t think these prices will hold up in the long term,” Anglo American Chief Executive Mark Cutifani said on a conference call with reporters Tuesday, referring to coal and iron ore.

BHP CEO Andrew Mackenzie, in comments to reporters in London Tuesday, said reduced stimulus in China and new supplies will likely hurt prices for bulk commodities.

But Mr. Mackenzie said he remains confident that, overall, demand from China will remain solid this year. “I think China is steady as she goes,” he said.

Executives are also growing concerned that an increasingly unpredictable political situation in the U.S. and elsewhere could spark trade disputes, disrupting global growth and demand for commodities.

BHP executives have singled out the policy platform of President Donald Trump’s administration, which they said could spark trade wars that weigh on business confidence, hurt investment and lead to higher inflation in the U.S. Mr. Cutifani has also cautioned Mr. Trump against pushing the world toward protectionism.

“It’s an uncertain world out there,” Mr. Mackenzie said. “Trade wars are not going to help anybody.”

White House deputy press secretary Lindsay Walters said Mr. Trump’s “policies will ultimately prioritize the best interests of the American people and American workers.”

Other mining executives have expressed enthusiasm about Mr. Trump’s plans to ramp up infrastructure spending in the U.S. Glencore CEO Ivan Glasenberg believes that a $1 trillion infrastructure program floated by Mr. Trump is likely to boost demand for the commodities his firm produces, especially copper.

Mr. Mackenzie and BHP Chairman Jac Nasser met with Mr. Trump, then president-elect, in January. At the meeting, they discussed the impact the U.S. policy direction could have on resources markets, Mr. Mackenzie said Tuesday.

>>> Newmont Mining misses by $0.06, beats on revs; reaffirms gold production out

Newmont Mining misses by $0.06, beats on revs; reaffirms gold production outlook, lowers FY17 capex guidance (37.44 +0.43)
  • Reports Q4 (Dec) earnings of $0.25 per share, excluding non-recurring items, $0.06 worse than the Capital IQ Consensus of $0.31; revenues rose 23.2% year/year to $1.79 bln vs the $1.75 bln Capital IQ Consensus.
  • Outlook:
    • Investments to explore and develop promising expansions and to address previously announced geotechnical issues at Carlin and changes to cost allocation between gold and copper are expected to slightly increase the co's 2017 and 2018 gold cost outlook. Economic assumptions include $1,200 per ounce gold, $2.25 per pound copper, $55 per barrel WTI and $0.75 AUD-USD exchange rate.
    • Gold: Attributable gold production outlook is in line with previously published five-year guidance and expected to increase to between 4.9 and 5.4 million ounces in 2017 as full year production at Merian and Long Canyon more than offsets declines at Twin Creeks and Yanacocha. Longer-term production of between 4.5 and 5.0 million ounces is expected with production from Long Canyon and Ahafo partly offsetting declines at maturing assets. Expansion projects at Ahafo, Yanacocha and Twin Creeks represent upside to both production and cost guidance.
    • CAS is expected to be between $700 and $750 per ounce in 2017 and between $700 and $800 per ounce in 2018, before any portfolio improvements. Co expects longer term CAS to improve to $650 and $750 per oz. AISC is expected to be between $940 and $1,000 per ounce in 2017 and between $950 and $1,050 per ounce in 2018, excluding further cost and efficiency improvements expected through the Company's ongoing Full Potential program.
    • Capex: Total capital is expected to be between $800 and $900 million in 2017, covering the remaining capital for Northwest Exodus and the Tanami Expansion Project. 2017 sustaining capital outlook of between $600 and $700 million represents a 24 percent reduction from previously published guidance due to cost savings and deferrals.
    • Copper: Boddington and Phoenix are expected to produce between 40,000 and 60,000 tonnes of copper per year in line with previous guidance excluding Batu Hijau. In 2017, copper costs are expected to be between $1.45 and $1.65 per pound CAS and between $1.85 and $2.05 per pound AISC. Longer term, copper CAS is expected to average between $1.50 and $1.90 per pound and AISC is expected to average between $1.85 and $2.15 per pound, well below previous guidance due to a shift in allocation of costs between copper and gold.