We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Patterson-UTI (PTEN) Q1 Earnings and Sales Beat Estimates
Read MoreHide Full Article
Patterson-UTI Energy, Inc. (PTEN - Free Report) reported first-quarter 2024 adjusted net profit of 15 cents per share, which beat the Zacks Consensus Estimate of 13 cents. This can be attributed to the impressive performance of the Completion Services segment. However, the bottom line declined from the year-ago quarter's level of 46 cents. This year-over-year deterioration was due to poor contribution from the Other Operations segment.
Total revenues of $1510.4 million marginally beat the Zacks Consensus Estimate of $1508 million. The top line also improved 90.7% year over year.This outperformance can be attributed to PTEN's improved revenue contribution from its Completion Services segment.
Patterson-UTI will pay its quarterly dividend of 8 cents per share on Jun 17, 2024, to shareholders of record as of Jun 3, 2024. Its share repurchase authorization had $945 million left as of Mar 31, 2024.
During the reported quarter, the company successfully met its annualized synergy target of $200 million from the NexTier merger. It also distributed $130 million to shareholders and affirmed its commitment to returning a minimum of $400 million to shareholders by 2024.
PTEN repurchased 9 million shares for $98 million during the first quarter. This represents 4% of the shares outstanding following the NexTier merger and the Ulterra acquisition.
Patterson-UTI Energy, Inc. Price, Consensus and EPS Surprise
Drilling Services: Revenues in this segment totaled $457.6 million, down 4.2% from the prior-year quarter’s figure of $477.7 million. The top line was also above our projection of $451.2 million. Operating profit amounted to $89.6 million compared with $101.3 million in the first quarter of 2023. However, the figure was below our estimate of $90.1 million.
Completion Services: This segment’s revenues of $945 million rose about 222.2% from the year-ago quarter’s figure of $293.3 million due to better pricing. The figure was also above our projection of $942.6 million.
Operating profit totaled $49.6 million compared with $44.4 million in the first quarter of 2023. However, the figure was below our estimate of $65.2 million.
Drilling Products: Revenues totaled $90 million, with an operating profit of $6.5 million. The reported figure was slightly above our estimate of $89.9 million. The operating profit was below our estimate of $39.3 million.
Other Services: Revenues amounted to $17.8 million, 14.4% lower than the year-ago quarter’s figure of $20.8 million. The figure was also below our projection of $18.3 million.
Operating profit amounted to $988,000 compared with $2 million in the first quarter of 2023. The figure beat our projection of $4,000.
Capital Expenditure & Financial Position
In the reported quarter, PTEN spent $226.9 million on capital programs compared with $117.6 million in the prior-year period. As of Mar 31, 2024, the company had cash and cash equivalents worth $170.2 million and long-term debt of $1.2 billion.
Patterson-UTI generated $366 million in cash from operations and $139 million in free cash flow.
Outlook
Patterson-UTI expects stable drilling and completion activity in oil basins, with the possibility of some operators adding drilling rigs later this year due to prevailing oil prices. While there has been a slight decline in natural gas activity in the second quarter, it has remained more resilient than initially expected. PTEN expects natural gas activity to remain steady throughout 2024.
The company expects to convert at least 40% of adjusted EBITDA to free cash flow. In Drilling Services, PTEN expects U.S. Contract Drilling to run an average of 114 U.S. rigs in the second quarter, with a sequential decline of about $300 in adjusted gross profit per operating day. The company also anticipates a sequential decline in adjusted gross profit for other Drilling Services.
The deployment of PTEN’s electric fleet is progressing as planned, with the aim of having 140,000 horsepower of electric frac equipment operational by mid-2024. The company expects second-quarter Drilling Products results to be identical to the first, with international growth offsetting seasonal declines in Canada.
PTEN’s Completion Services revenues for the second quarter is estimated to be around $860 million, with direct operating costs of approximately $690 million and an adjusted gross profit of about $170 million. The company anticipates an uptick in activity in the third quarter.
Completion Services activity has seen a slight downturn at the beginning of the second quarter, particularly in natural gas basins where PTEN’s customers are scaling back operations in response to current natural gas prices. The company also expects a few dedicated fleets to operate in the second quarter with planned gaps in its schedules.
Other revenues and adjusted gross profit are projected to remain stable in the second quarter compared to the first. For the same period, PTEN expects selling, general, and administrative expenses of $65 million, and depreciation, depletion, amortization, and impairment expenses of $265 million.
Overall, the company holds an optimistic outlook regarding its position in the U.S. shale industry, seeing value creation from recent mergers and acquisitions. PTEN aims to return a significant portion of its free cash flow to shareholders over the long term, subject to business conditions and other factors.
Important Energy Earnings so far
While we have discussed Patterson-UTI Energy’s first-quarter results in detail, let’s take a look at some other key energy reports of this season.
SLB (SLB - Free Report) , the largest oilfield contractor, announced first-quarter 2024 earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments, and a long-term debt of $10.7 billion.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported first-quarter 2024 adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.18, driven by a decline in total cost of sales. Adjusted operating income in the Refining segment totaled $1.7 billion, down from $4.1 billion in the year-ago quarter. The figure surpassed our estimate of $1.6 billion.
Valero’s total cost of sales declined to $29.8 billion from the year-ago figure of $32.1 billion. The figure is also below our estimate of $30.4 billion, primarily due to lower material costs and operating expenses. The first-quarter capital investment totaled $661 million, of which $563 million was allotted for sustaining the business.
Unique Zacks Analysis of Your Chosen Ticker
Pick one free report - opportunity may be withdrawn at any time
Image: Bigstock
Patterson-UTI (PTEN) Q1 Earnings and Sales Beat Estimates
Patterson-UTI Energy, Inc. (PTEN - Free Report) reported first-quarter 2024 adjusted net profit of 15 cents per share, which beat the Zacks Consensus Estimate of 13 cents. This can be attributed to the impressive performance of the Completion Services segment. However, the bottom line declined from the year-ago quarter's level of 46 cents. This year-over-year deterioration was due to poor contribution from the Other Operations segment.
Total revenues of $1510.4 million marginally beat the Zacks Consensus Estimate of $1508 million. The top line also improved 90.7% year over year.This outperformance can be attributed to PTEN's improved revenue contribution from its Completion Services segment.
Patterson-UTI will pay its quarterly dividend of 8 cents per share on Jun 17, 2024, to shareholders of record as of Jun 3, 2024. Its share repurchase authorization had $945 million left as of Mar 31, 2024.
During the reported quarter, the company successfully met its annualized synergy target of $200 million from the NexTier merger. It also distributed $130 million to shareholders and affirmed its commitment to returning a minimum of $400 million to shareholders by 2024.
PTEN repurchased 9 million shares for $98 million during the first quarter. This represents 4% of the shares outstanding following the NexTier merger and the Ulterra acquisition.
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 $457.6 million, down 4.2% from the prior-year quarter’s figure of $477.7 million. The top line was also above our projection of $451.2 million. Operating profit amounted to $89.6 million compared with $101.3 million in the first quarter of 2023. However, the figure was below our estimate of $90.1 million.
Completion Services: This segment’s revenues of $945 million rose about 222.2% from the year-ago quarter’s figure of $293.3 million due to better pricing. The figure was also above our projection of $942.6 million.
Operating profit totaled $49.6 million compared with $44.4 million in the first quarter of 2023. However, the figure was below our estimate of $65.2 million.
Drilling Products: Revenues totaled $90 million, with an operating profit of $6.5 million. The reported figure was slightly above our estimate of $89.9 million. The operating profit was below our estimate of $39.3 million.
Other Services: Revenues amounted to $17.8 million, 14.4% lower than the year-ago quarter’s figure of $20.8 million. The figure was also below our projection of $18.3 million.
Operating profit amounted to $988,000 compared with $2 million in the first quarter of 2023. The figure beat our projection of $4,000.
Capital Expenditure & Financial Position
In the reported quarter, PTEN spent $226.9 million on capital programs compared with $117.6 million in the prior-year period. As of Mar 31, 2024, the company had cash and cash equivalents worth $170.2 million and long-term debt of $1.2 billion.
Patterson-UTI generated $366 million in cash from operations and $139 million in free cash flow.
Outlook
Patterson-UTI expects stable drilling and completion activity in oil basins, with the possibility of some operators adding drilling rigs later this year due to prevailing oil prices. While there has been a slight decline in natural gas activity in the second quarter, it has remained more resilient than initially expected. PTEN expects natural gas activity to remain steady throughout 2024.
The company expects to convert at least 40% of adjusted EBITDA to free cash flow. In Drilling Services, PTEN expects U.S. Contract Drilling to run an average of 114 U.S. rigs in the second quarter, with a sequential decline of about $300 in adjusted gross profit per operating day. The company also anticipates a sequential decline in adjusted gross profit for other Drilling Services.
The deployment of PTEN’s electric fleet is progressing as planned, with the aim of having 140,000 horsepower of electric frac equipment operational by mid-2024. The company expects second-quarter Drilling Products results to be identical to the first, with international growth offsetting seasonal declines in Canada.
PTEN’s Completion Services revenues for the second quarter is estimated to be around $860 million, with direct operating costs of approximately $690 million and an adjusted gross profit of about $170 million. The company anticipates an uptick in activity in the third quarter.
Completion Services activity has seen a slight downturn at the beginning of the second quarter, particularly in natural gas basins where PTEN’s customers are scaling back operations in response to current natural gas prices. The company also expects a few dedicated fleets to operate in the second quarter with planned gaps in its schedules.
Other revenues and adjusted gross profit are projected to remain stable in the second quarter compared to the first. For the same period, PTEN expects selling, general, and administrative expenses of $65 million, and depreciation, depletion, amortization, and impairment expenses of $265 million.
Overall, the company holds an optimistic outlook regarding its position in the U.S. shale industry, seeing value creation from recent mergers and acquisitions. PTEN aims to return a significant portion of its free cash flow to shareholders over the long term, subject to business conditions and other factors.
Important Energy Earnings so far
While we have discussed Patterson-UTI Energy’s first-quarter results in detail, let’s take a look at some other key energy reports of this season.
SLB (SLB - Free Report) , the largest oilfield contractor, announced first-quarter 2024 earnings of 75 cents per share (excluding charges and credits), which beat the Zacks Consensus Estimate of 74 cents. The bottom line also increased from the year-ago quarter’s level of 63 cents.
SLB’s strong quarterly earnings resulted from higher evaluation and stimulation activities in the international market. As of Mar 31, 2024, the company had approximately $3.5 billion in cash and short-term investments, and a long-term debt of $10.7 billion.
Independent oil refiner and marketer Valero Energy (VLO - Free Report) reported first-quarter 2024 adjusted earnings of $3.82 per share, which beat the Zacks Consensus Estimate of $3.18, driven by a decline in total cost of sales. Adjusted operating income in the Refining segment totaled $1.7 billion, down from $4.1 billion in the year-ago quarter. The figure surpassed our estimate of $1.6 billion.
Valero’s total cost of sales declined to $29.8 billion from the year-ago figure of $32.1 billion. The figure is also below our estimate of $30.4 billion, primarily due to lower material costs and operating expenses. The first-quarter capital investment totaled $661 million, of which $563 million was allotted for sustaining the business.