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Patterson-UTI (PTEN) Q4 Earnings and Sales Beat Estimates
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Patterson-UTI Energy, Inc. (PTEN - Free Report) reported fourth-quarter 2023 adjusted net profit of 19 cents per share, which beat the Zacks Consensus Estimate of 18 cents. This outperformance can be attributed to the impressive performance of the Completion Services and Drilling Services segments. However, the bottom line declined from the year-ago quarter's level of 46 cents. This underperformance can be attributed to poor contribution from the Other Operations segment.
Total revenues of $1.6 billion beat the Zacks Consensus Estimate of $1.5 billion. The top line also improved 100.9% on a year-over-year basis. This outperformance can be attributed to PTEN's improved revenue contribution from its Completion Services segment on a year-over-year basis.
Patterson-UTI will pay its quarterly dividend of 8 cents per share on Mar 15, 2024, to shareholders of record as of Mar 1, 2024. Its share repurchase authorization had $1 billion left as of Dec 31, 2023.
Patterson-UTI Energy, Inc. Price, Consensus and EPS Surprise
Drilling Services: Revenues in this segment totaled $463.6 million, up 0.4% from the prior-year quarter’s figure of $461.5 million. The figure also beat our projection of $387.6 million. Operating profit amounted to $92.7 million compared with $81.2 million in the fourth quarter of 2022. However, the figure was lower than our estimate of $97 million.
Completion Services: This segment’s revenues of $1 billion rose about 230.6% from the year-ago quarter’s figure of $306.8 million due to better pricing. The figure also exceeded our expectation of $949.6 million.
Operating profit totaled $70.3 million compared with $58.6 million in the fourth quarter of 2022. However, the figure was lower than our estimate of $81.9 million.
Drilling Products: Revenues totaled $88.1 million, with an operating loss of $261,000. The fourth quarter marked PTEN's first complete reporting period following its acquisition of Ulterra Drilling Technologies.
Other Services: Revenues amounted to $18.3 million, 9.4% lower than the year-ago quarter’s figure of $20.2 million. Operating profit amounted to $1 million compared with $3.5 million in the fourth quarter of 2022.
Capital Expenditure & Financial Position
In the reported quarter, PTEN spent $205.3 million on capital programs compared with $119.2 million in the prior-year period. As of Dec 31, 2023, the company had cash and cash equivalents worth $192.7 million and long-term debt of $1.2 billion.
Outlook
Patterson-UTI expects oil basin activity to remain relatively steady throughout 2024, while natural gas basins could experience a negative impact from current low prices.
In the Drilling Services segment, the company looks forward to operate an average of 120 U.S. rigs in the first quarter of 2024, up from 118 in the previous quarter. It expects first-quarter Drilling Services adjusted gross profit to be relatively flat quarter over quarter.
Completion Services segment revenues are expected to be in the range of $940-$950 million, with approximately $750 million in direct operating costs and an adjusted gross profit of $190-$200 million.
In the Drilling Products segment, demand is expected to remain steady through the first quarter. Revenues are expected to be approximately $90 million, with $50 million in direct operating costs and an adjusted gross profit of $40 million.
In the Other segment, revenues and adjusted gross profit are expected to be flat sequentially.
Patterson-UTI expects selling, general, and administrative expenses of approximately $65 million and depreciation, depletion, amortization, and impairment expenses of approximately $280 million for the first quarter.
For 2024, PTEN expects an effective tax rate of 24%, with annual cash taxes in the $35-$45 million range. The company also anticipates spending around $740 million on capital expenditures. This allocation includes $285 million for Drilling Services, $360 million for Completion Services, $55 million for Drilling Products, and $40 million for Other and Corporate purposes.
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Patterson-UTI (PTEN) Q4 Earnings and Sales Beat Estimates
Patterson-UTI Energy, Inc. (PTEN - Free Report) reported fourth-quarter 2023 adjusted net profit of 19 cents per share, which beat the Zacks Consensus Estimate of 18 cents. This outperformance can be attributed to the impressive performance of the Completion Services and Drilling Services segments. However, the bottom line declined from the year-ago quarter's level of 46 cents. This underperformance can be attributed to poor contribution from the Other Operations segment.
Total revenues of $1.6 billion beat the Zacks Consensus Estimate of $1.5 billion. The top line also improved 100.9% on a year-over-year basis. This outperformance can be attributed to PTEN's improved revenue contribution from its Completion Services segment on a year-over-year basis.
Patterson-UTI will pay its quarterly dividend of 8 cents per share on Mar 15, 2024, to shareholders of record as of Mar 1, 2024. Its share repurchase authorization had $1 billion left as of Dec 31, 2023.
Patterson-UTI Energy, Inc. Price, Consensus and EPS Surprise
Patterson-UTI Energy, Inc. price-consensus-eps-surprise-chart | Patterson-UTI Energy, Inc. Quote
Segmental Performances
Drilling Services: Revenues in this segment totaled $463.6 million, up 0.4% from the prior-year quarter’s figure of $461.5 million. The figure also beat our projection of $387.6 million. Operating profit amounted to $92.7 million compared with $81.2 million in the fourth quarter of 2022. However, the figure was lower than our estimate of $97 million.
Completion Services: This segment’s revenues of $1 billion rose about 230.6% from the year-ago quarter’s figure of $306.8 million due to better pricing. The figure also exceeded our expectation of $949.6 million.
Operating profit totaled $70.3 million compared with $58.6 million in the fourth quarter of 2022. However, the figure was lower than our estimate of $81.9 million.
Drilling Products: Revenues totaled $88.1 million, with an operating loss of $261,000. The fourth quarter marked PTEN's first complete reporting period following its acquisition of Ulterra Drilling Technologies.
Other Services: Revenues amounted to $18.3 million, 9.4% lower than the year-ago quarter’s figure of $20.2 million. Operating profit amounted to $1 million compared with $3.5 million in the fourth quarter of 2022.
Capital Expenditure & Financial Position
In the reported quarter, PTEN spent $205.3 million on capital programs compared with $119.2 million in the prior-year period. As of Dec 31, 2023, the company had cash and cash equivalents worth $192.7 million and long-term debt of $1.2 billion.
Outlook
Patterson-UTI expects oil basin activity to remain relatively steady throughout 2024, while natural gas basins could experience a negative impact from current low prices.
In the Drilling Services segment, the company looks forward to operate an average of 120 U.S. rigs in the first quarter of 2024, up from 118 in the previous quarter. It expects first-quarter Drilling Services adjusted gross profit to be relatively flat quarter over quarter.
Completion Services segment revenues are expected to be in the range of $940-$950 million, with approximately $750 million in direct operating costs and an adjusted gross profit of $190-$200 million.
In the Drilling Products segment, demand is expected to remain steady through the first quarter. Revenues are expected to be approximately $90 million, with $50 million in direct operating costs and an adjusted gross profit of $40 million.
In the Other segment, revenues and adjusted gross profit are expected to be flat sequentially.
Patterson-UTI expects selling, general, and administrative expenses of approximately $65 million and depreciation, depletion, amortization, and impairment expenses of approximately $280 million for the first quarter.
For 2024, PTEN expects an effective tax rate of 24%, with annual cash taxes in the $35-$45 million range. The company also anticipates spending around $740 million on capital expenditures. This allocation includes $285 million for Drilling Services, $360 million for Completion Services, $55 million for Drilling Products, and $40 million for Other and Corporate purposes.
Zacks Rank and Key Picks
Currently, PTEN carries a Zacks Rank #4 (Sell).
Investors interested in the energy sector might look at some better-ranked stocks like Subsea 7 S.A. (SUBCY - Free Report) and Energy Transfer LP (ET - Free Report) , both sporting a Zacks Rank #1 (Strong Buy), and Murphy USA Inc. (MUSA - Free Report) , carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Subsea 7 is valued at $3.96 billion. The company currently pays a dividend of 38 cents per share, or 2.93%, on an annual basis.
SUBCY offers offshore project services for the energy industry, specializing in subsea field development, covering project management, design, engineering, procurement, fabrication, survey, installation and commissioning of seabed production facilities.
Energy Transfer is valued at $43.91 billion. The company currently pays a dividend of $1.26 per share, or 9.03%, on an annual basis.
ET is an independent energy company, principally engaged in the acquisition, exploration, development and production of crude oil and natural gas.
Murphy USA is valued at around $8.34 billion. In the past year, its shares have risen 47%.
MUSA is involved in the marketing of retail motor fuel products and convenience merchandise, operating retail stores under the brands Murphy USA, Murphy Express and QuickChek.