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Patterson-UTI (PTEN) Loss Narrower Than Expected in Q3
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Onshore contract driller Patterson-UTI Energy Inc. (PTEN - Free Report) reported loss per share of 58 cents. The quarterly figure was narrower the Zacks Consensus Estimate of a loss of 59 cents but much wider than the year-ago quarter loss of 26 cents.
The narrower-than-expected loss may be attributed to good execution and reduction in cost structure. The positives were offset partially by lower contribution from the Contract Drilling owing to significantly low operational rig counts.
Revenues of $206 million plunged 51.2% from the year-ago quarter but were higher than the Zacks Consensus Estimate of $204 million.
Segmental Performance
Contract Drilling: This segment’s revenues totaled $123.7 million, down 52.8% year over year. Notably, revenues from this accounted for 60% of the total revenue.
Average revenues per operating day decreased to $21,870 from $26,010 in the third quarter of 2015. Average direct costs per operating day came in at $13,180 as against $13,580 in the year-ago quarter.
We note that the segment was impacted by a steep decline in both operating days – from 10,067 to 5,655 – and a decrease in the number of operational rigs from 109 to 61.
Also, the segment recorded operating loss of $67.8 million, much narrower than the year-ago loss of $131.3 million.
Pressure Pumping: Revenues of $78.2 million declined 49.4% year over year. Moreover, the segment reported a loss of $46.6 million, substantially narrower than a loss of $183.5 million in the prior-year quarter. The segment was positively impacted by increased product sales and higher activity levels.
Oil and Natural Gas Production and Exploration: Revenues declined almost 30% from the year-ago quarter to $4.2 million.
The segment reported earnings of $0.6 million, which compared favorably with a loss of $1.8 million in the year-ago comparable quarter. Lower operating expenses aided the results.
Direct Operating Costs
The company reported direct operating expenses of $153.6 million, down 44.7% from $277.8 million in the year-ago quarter.
Capital Expenditure & Balance Sheet
During the quarter, Patterson-UTI spent approximately $28.7 million on capital programs compared with $144.6 million spent in the third quarter of 2015. As of Sep 30, 2016, the company had $36.9 million in cash and $598.4 million in long-term debt, including current portion.
Outlook
Patterson-UTI projects an average of 43 rigs to be operational during the fourth quarter. The company also anticipates an average of 32 rigs to be under term contract in 2017.
Zacks Ranks
Currently, Patterson-UTI carries a Zacks Rank #3 (Hold).
In the last four quarters, Enviva Partners posted an average positive earnings surprise of 0.19%.
Ultra Petroleum, on the other hand, posted an average positive earnings surprise of 65.91% in the last four quarters.
In the last four quarters, W&T Offshore posted an average positive earnings surprise of 23.63%.
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Patterson-UTI (PTEN) Loss Narrower Than Expected in Q3
Onshore contract driller Patterson-UTI Energy Inc. (PTEN - Free Report) reported loss per share of 58 cents. The quarterly figure was narrower the Zacks Consensus Estimate of a loss of 59 cents but much wider than the year-ago quarter loss of 26 cents.
The narrower-than-expected loss may be attributed to good execution and reduction in cost structure. The positives were offset partially by lower contribution from the Contract Drilling owing to significantly low operational rig counts.
Revenues of $206 million plunged 51.2% from the year-ago quarter but were higher than the Zacks Consensus Estimate of $204 million.
Segmental Performance
Contract Drilling: This segment’s revenues totaled $123.7 million, down 52.8% year over year. Notably, revenues from this accounted for 60% of the total revenue.
Average revenues per operating day decreased to $21,870 from $26,010 in the third quarter of 2015. Average direct costs per operating day came in at $13,180 as against $13,580 in the year-ago quarter.
PATTERSON-UTI Price, Consensus and EPS Surprise
PATTERSON-UTI Price, Consensus and EPS Surprise | PATTERSON-UTI Quote
We note that the segment was impacted by a steep decline in both operating days – from 10,067 to 5,655 – and a decrease in the number of operational rigs from 109 to 61.
Also, the segment recorded operating loss of $67.8 million, much narrower than the year-ago loss of $131.3 million.
Pressure Pumping: Revenues of $78.2 million declined 49.4% year over year. Moreover, the segment reported a loss of $46.6 million, substantially narrower than a loss of $183.5 million in the prior-year quarter. The segment was positively impacted by increased product sales and higher activity levels.
Oil and Natural Gas Production and Exploration: Revenues declined almost 30% from the year-ago quarter to $4.2 million.
The segment reported earnings of $0.6 million, which compared favorably with a loss of $1.8 million in the year-ago comparable quarter. Lower operating expenses aided the results.
Direct Operating Costs
The company reported direct operating expenses of $153.6 million, down 44.7% from $277.8 million in the year-ago quarter.
Capital Expenditure & Balance Sheet
During the quarter, Patterson-UTI spent approximately $28.7 million on capital programs compared with $144.6 million spent in the third quarter of 2015. As of Sep 30, 2016, the company had $36.9 million in cash and $598.4 million in long-term debt, including current portion.
Outlook
Patterson-UTI projects an average of 43 rigs to be operational during the fourth quarter. The company also anticipates an average of 32 rigs to be under term contract in 2017.
Zacks Ranks
Currently, Patterson-UTI carries a Zacks Rank #3 (Hold).
Some better-ranked players from the broader energy sector include Enviva Partners, LP (EVA - Free Report) , Ultra Petroleum Corp. and W&T Offshore Inc. (WTI - Free Report) . All these stocks sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
In the last four quarters, Enviva Partners posted an average positive earnings surprise of 0.19%.
Ultra Petroleum, on the other hand, posted an average positive earnings surprise of 65.91% in the last four quarters.
In the last four quarters, W&T Offshore posted an average positive earnings surprise of 23.63%.
Confidential from Zacks
Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>