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Patterson-UTI (PTEN) Down 7.5% Since Last Earnings Report: Can It Rebound?
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It has been about a month since the last earnings report for Patterson-UTI (PTEN - Free Report) . Shares have lost about 7.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Patterson-UTI due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Patterson-UTI reported fourth-quarter 2022 net profit of 46 cents per share, beating the Zacks Consensus Estimate of a profit of 43 cents and turning around from the year-ago quarter's loss of 38 cents per share. This outperformance can be attributed to fourth-quarter revenues beating the consensus mark due to strong performance of contract drilling, pressure pumping, directional drilling and other segmental operations.
The company’s total quarterly revenues of $788.5 million outperformed the Zacks Consensus Estimate of $760 million. The top line also improved by an impressive 69% on a year-over-year basis.
Patterson-UTI, a leading provider of oilfield services and products to oil and natural gas exploration and production companies, declared a quarterly cash dividend payout of 8 cents per share. The dividend will be paid out on Mar 16, 2023, to shareholders of record as of Mar 2, 2023.
Segmental Performances
Contract Drilling: Revenues totaled $399.4 million, up 73% from the year-ago quarter’s figure of $230.9 million. It also beat the Zacks Consensus Estimate of $378 million due to continued day rate pricing momentum, contract renewals and increasing activity.
The unit posted an operating profit of $78.2 million in the fourth quarter against the year-ago loss of $264.3 million due to favorable pricing.
Pressure Pumping: Revenues of $306.8 million rose about 67.4% from the year-ago figure of $183.3 million due to good pricing. It also beat the Zacks Consensus Estimate of $270 million.
Moreover, the segment posted an operating profit of $58.6 million compared to a loss of $41.4 million in the fourth quarter of 2021. The profit is attributable to high utilization of active spreads in the reported quarter, minimal holiday-related downtime and better pricing.
Directional Drilling: Revenues totaled $59.5 million, up 68.8% from the last year’s figure of $35.2 million due to higher activity and more favorable pricing. The segment also posted an operating profit of $5.3 million against a loss of $20.7 million reported in the corresponding quarter of 2021, as it veered toward more high-margin work.
Other Operations: Revenues came in at $22.8 million, up about 33.4% from the year-ago quarter’s $17.1 million. The unit also posted a quarterly profit of $1.1 million compared to a loss of $727,000 in the year-ago quarter.
Capital Expenditure & Financial Position
In the fourth quarter of 2022, PTEN spent $119.2 million on capital programs (compared with $76.2 million in the fourth quarter of 2021). As of Dec 31, 2022, the company had $137.6 million of cash and cash equivalents and $830.9 million as long-term debt.
During the fourth quarter of 2022, Patterson-UTI Energy repurchased 3.3 million shares of common stock for an aggregate of $57.2 million.
Outlook
In the first quarter of 2023, Patterson-UTI expects revenues of $280 million from pressure pumping, $9 million from contract drilling, $54 million from Directional Drilling, and $22.8 million from other operations.
It also estimates the rig count to average 130 rigs in the United States and then gradually increase throughout the year due to strong demand for Tier-1 and availability of super-spec rigs.
The capital expenditure for 2023 is expected at $550 million. PTEN aims to return half of the free cash flow generated to shareholders through dividends and share repurchases.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -20% due to these changes.
VGM Scores
At this time, Patterson-UTI has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Patterson-UTI has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.
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Patterson-UTI (PTEN) Down 7.5% Since Last Earnings Report: Can It Rebound?
It has been about a month since the last earnings report for Patterson-UTI (PTEN - Free Report) . Shares have lost about 7.5% in that time frame, underperforming the S&P 500.
Will the recent negative trend continue leading up to its next earnings release, or is Patterson-UTI due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.
Patterson-UTI Reports Better-than-Expected Q4 Earnings
Patterson-UTI reported fourth-quarter 2022 net profit of 46 cents per share, beating the Zacks Consensus Estimate of a profit of 43 cents and turning around from the year-ago quarter's loss of 38 cents per share. This outperformance can be attributed to fourth-quarter revenues beating the consensus mark due to strong performance of contract drilling, pressure pumping, directional drilling and other segmental operations.
The company’s total quarterly revenues of $788.5 million outperformed the Zacks Consensus Estimate of $760 million. The top line also improved by an impressive 69% on a year-over-year basis.
Patterson-UTI, a leading provider of oilfield services and products to oil and natural gas exploration and production companies, declared a quarterly cash dividend payout of 8 cents per share. The dividend will be paid out on Mar 16, 2023, to shareholders of record as of Mar 2, 2023.
Segmental Performances
Contract Drilling: Revenues totaled $399.4 million, up 73% from the year-ago quarter’s figure of $230.9 million. It also beat the Zacks Consensus Estimate of $378 million due to continued day rate pricing momentum, contract renewals and increasing activity.
The unit posted an operating profit of $78.2 million in the fourth quarter against the year-ago loss of $264.3 million due to favorable pricing.
Pressure Pumping: Revenues of $306.8 million rose about 67.4% from the year-ago figure of $183.3 million due to good pricing. It also beat the Zacks Consensus Estimate of $270 million.
Moreover, the segment posted an operating profit of $58.6 million compared to a loss of $41.4 million in the fourth quarter of 2021. The profit is attributable to high utilization of active spreads in the reported quarter, minimal holiday-related downtime and better pricing.
Directional Drilling: Revenues totaled $59.5 million, up 68.8% from the last year’s figure of $35.2 million due to higher activity and more favorable pricing. The segment also posted an operating profit of $5.3 million against a loss of $20.7 million reported in the corresponding quarter of 2021, as it veered toward more high-margin work.
Other Operations: Revenues came in at $22.8 million, up about 33.4% from the year-ago quarter’s $17.1 million. The unit also posted a quarterly profit of $1.1 million compared to a loss of $727,000 in the year-ago quarter.
Capital Expenditure & Financial Position
In the fourth quarter of 2022, PTEN spent $119.2 million on capital programs (compared with $76.2 million in the fourth quarter of 2021). As of Dec 31, 2022, the company had $137.6 million of cash and cash equivalents and $830.9 million as long-term debt.
During the fourth quarter of 2022, Patterson-UTI Energy repurchased 3.3 million shares of common stock for an aggregate of $57.2 million.
Outlook
In the first quarter of 2023, Patterson-UTI expects revenues of $280 million from pressure pumping, $9 million from contract drilling, $54 million from Directional Drilling, and $22.8 million from other operations.
It also estimates the rig count to average 130 rigs in the United States and then gradually increase throughout the year due to strong demand for Tier-1 and availability of super-spec rigs.
The capital expenditure for 2023 is expected at $550 million. PTEN aims to return half of the free cash flow generated to shareholders through dividends and share repurchases.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed a downward trend in estimates review.
The consensus estimate has shifted -20% due to these changes.
VGM Scores
At this time, Patterson-UTI has a great Growth Score of A, though it is lagging a bit on the Momentum Score front with a B. Charting a somewhat similar path, the stock was allocated a grade of A on the value side, putting it in the top quintile for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. It's no surprise Patterson-UTI has a Zacks Rank #5 (Strong Sell). We expect a below average return from the stock in the next few months.