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Patterson-UTI (PTEN) Q1 Loss Wider Than Expected, Revenues Meet

Patterson-UTI Energy, Inc. PTEN reported first-quarter adjusted net loss of 57 cents per share, slightly wider than the Zacks Consensus Estimate of a loss of 56 cents per share.

Bottom-line results can be attributed to disappointing operating performance from the pressure pumping segment, primarily due to the winter storm. Precisely, operating loss from the segment was $39.7 million, wider than the Zacks Consensus Estimate operating loss of $32 million.

However, the loss was narrower than the year-ago quarter's figure of 45 cents due to higher contribution from contract drilling and directional drilling segments.

The company’s total quarterly revenues of $241 million were in line with the Zacks Consensus Estimate. However, the top line declined 46% on a year-over-year basis.

PattersonUTI Energy, Inc. Price, Consensus and EPS Surprise

 

Segmental Performance

Contract Drilling: Revenues totaled $133.5 million, down 50.1% year over year. Meanwhile, the unit lost $48.6 million in the first quarter, significantly narrower than the year-ago loss of $404 million, plagued by a fall in both operating days (from 11,235 to 6,183) and the number of rigs operational (from 123 to 69).

Pressure Pumping: Revenues of $75.8 million dropped 39.4% from the year-ago figure of $125.1 million. Moreover, the segment’s operating loss widened to $39.7 million from $35.5 million in the first quarter of 2020, attributable to a decline in industry completion activity levels in the Northeast and the significant impacts of the winter storm.

Directional Drilling: Revenues summed $19.7 million, down 43% year over year. Also, the segment’s operating loss narrowed to $4.9 million from a loss of $11 million reported in the corresponding quarter of 2020 as a result of cost-control measures and market share gains.

Other Operations: Revenues were $11.9 million, 37.2% below the year-ago quarter’s $19 million. However, the unit incurred a reduced quarterly loss of $4.6 million from a loss of $18.8 million recorded in the year-ago quarter.

Capital Expenditure & Financial Position

In first-quarter 2021, Patterson-UTI spent $18.5 million on capital programs (compared with $71.9 million in the first quarter of 2020). As of Mar 31, 2021, the company had $214 million in cash and cash equivalents, and $901.7 million as long-term debt.

The Houston, TX-based company maintained its quarterly dividend of 2 cents a share, payable Jun 17, 2021, to its shareholders of record as of Jun 3, 2021.

Outlook

Based on contracts currently in place, Patterson-UTI expects its second-quarter 2021 rig count to average 39 rigs under term contracts. Further, as the onshore driller foresees an improvement in drilling activity, the company expects 73 rigs, on average, from 69 rigs in the first quarter of 2021.

Average rig revenues per day are estimated to be $20,900 for the second quarter, with an average rig margin of $6,200.

For second-quarter 2021, the company expects depreciation, depletion, amortization and impairment expenses of $145 million, while selling, general and administrative expenses are estimated at $22 million.

For 2021, the company expects an effective tax rate of 17%.

Zacks Rank & Stocks to Consider

Patterson-UTI currently carries a Zacks Rank #3 (Hold).

Some better-ranked players in the energy space are Royal Dutch Shell Plc RDS.AOceaneering International, Inc. OII and Ecopetrol S.A. EC , each presently sporting a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Shell’s earnings for 2021 are expected to increase 15.7% year over year.

Oceaneering’s earnings for 2021 are expected to surge 608.3% year over year.

Ecopetrol’s bottom line for 2021 is expected to increase 26.5% year over year.

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