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Patterson-UTI (PTEN) Q4 Loss in Line with Estimates
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Onshore contract driller Patterson-UTI Energy Inc. (PTEN - Free Report) reported loss per share of 53 cents, in line with the Zacks Consensus Estimate. A pick-up in drilling activity was offset by tight margins.
However, Patterson-UTI’s performance deteriorated from the year-ago loss of 40 cents per share.
Revenues of $246.9 million were down 27% from the year-ago quarter but were higher than the Zacks Consensus Estimate of $236 million.
Patterson-UTI Energy, Inc. Price, Consensus and EPS Surprise
Contract Drilling: This segment’s revenues totaled $136.1 million (55% of total revenue), down 33% year over year.
Average revenues per operating day decreased to $21,640 from $24,240 in the fourth quarter of 2015, while average direct costs per operating day came in at $13,770, up from $12,640 in the year-ago quarter.
The segment was also impacted by a steep decline in both the operating days (from 8,344 to 6,288) and the number of rigs operational (from 91 to 68) on the back of severe stress in the oil and gas industry.
Consequently, the segment recorded operating loss of $62.5 million – wider than the loss of $25.5 million incurred in the year-earlier quarter.
Pressure Pumping: Revenues of $105.6 million were down 20% year over year. Moreover, the segment reported a loss of $40.1 million, worsening from the loss of $37.8 million in the prior-year quarter. Despite recent improvements, the segment continues to be weighed down by tight spending from exploration and production firms that impacted activity levels. To make matters worse, even the work that has been available is making less profits.
Other Operations: Revenues came in at $5.2 million, 12% higher than the year-ago quarter. The rebound in commodity prices meant that the unit incurred a narrower quarterly loss of $1.1 million, as against the loss of $3.2 million recorded in year-ago quarter.
Direct Operating Costs
The company – which counts Nabors Industries Ltd. (NBR - Free Report) , Helmerich & Payne Inc. (HP - Free Report) and Precision Drilling Corp. (PDS - Free Report) as its peers – reported direct operating expenses of $189.4 million, reflecting a 17% decrease from $226.8 million reported in the year-ago quarter.
Capital Expenditure & Balance Sheet
During the quarter, Patterson-UTI spent approximately $39.3 million on capital programs (as against $135.6 million in the fourth quarter of 2015). Capital expenditure for the full-year 2016 came in at $119.8 million (down 84% from 2015).
As of Dec 31, 2016, the company had $35.2 million in cash and $598.4 million in long-term debt.
Outlook
Patterson-UTI management remains upbeat over its business following the recovery in land rig count and the recent bullishness in activity and pricing. In fact, the company sees 2017 as an exciting year in the making.
Patterson-UTI expects an average of 44 rigs to be operational under term contracts during the first quarter and 37 for the entire 2017. In pressure pumping, the Zacks Rank #2 (Buy) company expects first quarter revenues to rise 25% from the fourth quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Patterson-UTI pegged its 2017 capital spending projection at $350 million.
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Patterson-UTI (PTEN) Q4 Loss in Line with Estimates
Onshore contract driller Patterson-UTI Energy Inc. (PTEN - Free Report) reported loss per share of 53 cents, in line with the Zacks Consensus Estimate. A pick-up in drilling activity was offset by tight margins.
However, Patterson-UTI’s performance deteriorated from the year-ago loss of 40 cents per share.
Revenues of $246.9 million were down 27% from the year-ago quarter but were higher than the Zacks Consensus Estimate of $236 million.
Patterson-UTI Energy, Inc. Price, Consensus and EPS Surprise
Patterson-UTI Energy, Inc. Price, Consensus and EPS Surprise | Patterson-UTI Energy, Inc. Quote
Segmental Performance
Contract Drilling: This segment’s revenues totaled $136.1 million (55% of total revenue), down 33% year over year.
Average revenues per operating day decreased to $21,640 from $24,240 in the fourth quarter of 2015, while average direct costs per operating day came in at $13,770, up from $12,640 in the year-ago quarter.
The segment was also impacted by a steep decline in both the operating days (from 8,344 to 6,288) and the number of rigs operational (from 91 to 68) on the back of severe stress in the oil and gas industry.
Consequently, the segment recorded operating loss of $62.5 million – wider than the loss of $25.5 million incurred in the year-earlier quarter.
Pressure Pumping: Revenues of $105.6 million were down 20% year over year. Moreover, the segment reported a loss of $40.1 million, worsening from the loss of $37.8 million in the prior-year quarter. Despite recent improvements, the segment continues to be weighed down by tight spending from exploration and production firms that impacted activity levels. To make matters worse, even the work that has been available is making less profits.
Other Operations: Revenues came in at $5.2 million, 12% higher than the year-ago quarter. The rebound in commodity prices meant that the unit incurred a narrower quarterly loss of $1.1 million, as against the loss of $3.2 million recorded in year-ago quarter.
Direct Operating Costs
The company – which counts Nabors Industries Ltd. (NBR - Free Report) , Helmerich & Payne Inc. (HP - Free Report) and Precision Drilling Corp. (PDS - Free Report) as its peers – reported direct operating expenses of $189.4 million, reflecting a 17% decrease from $226.8 million reported in the year-ago quarter.
Capital Expenditure & Balance Sheet
During the quarter, Patterson-UTI spent approximately $39.3 million on capital programs (as against $135.6 million in the fourth quarter of 2015). Capital expenditure for the full-year 2016 came in at $119.8 million (down 84% from 2015).
As of Dec 31, 2016, the company had $35.2 million in cash and $598.4 million in long-term debt.
Outlook
Patterson-UTI management remains upbeat over its business following the recovery in land rig count and the recent bullishness in activity and pricing. In fact, the company sees 2017 as an exciting year in the making.
Patterson-UTI expects an average of 44 rigs to be operational under term contracts during the first quarter and 37 for the entire 2017. In pressure pumping, the Zacks Rank #2 (Buy) company expects first quarter revenues to rise 25% from the fourth quarter. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Patterson-UTI pegged its 2017 capital spending projection at $350 million.
Zacks’ Best Private Investment Ideas
In addition to the recommendations that are available to the public on our website, how would you like to follow all Zacks' private buys and sells in real time?
Our experts cover all kinds of trades… from value to momentum . . . from stocks under $10 to ETF and option moves . . . from stocks that corporate insiders are buying up to companies that are about to report positive earnings surprises. You can even look inside exclusive portfolios that are normally closed to new investors. Starting today, for the next month, you can have unrestricted access. Click here for Zacks' private trades >>