雅虎香港財經 Patterson-UTI (PTEN) Down 0.1% Since Last Earnings Report: Can It Rebound?
A month has gone by since the last earnings report for Patterson-UTI (PTEN). Shares have lost about 0.1% 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 its most recent earnings report in order to get a better handle on the important catalysts.
Patterson-UTI Q1 Earnings & Sales Beat
Patterson-UTI Energy 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 $1,508 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.
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
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.
How Have Estimates Been Moving Since Then?
It turns out, estimates review have trended downward during the past month.
The consensus estimate has shifted -29.74% due to these changes.
VGM Scores
Currently, Patterson-UTI has a strong 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 20% 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 #4 (Sell). We expect a below average return from the stock in the next few months.
Performance of an Industry Player
Patterson-UTI belongs to the Zacks Oil and Gas - Drilling industry. Another stock from the same industry, Nabors Industries (NBR), has gained 2.2% over the past month. More than a month has passed since the company reported results for the quarter ended March 2024.
Nabors reported revenues of $743.91 million in the last reported quarter, representing a year-over-year change of -5.7%. EPS of -$5.16 for the same period compares with -$0.55 a year ago.
For the current quarter, Nabors is expected to post a loss of $1.81 per share, indicating a change of +19.9% from the year-ago quarter. The Zacks Consensus Estimate has changed -4% over the last 30 days.
The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Nabors. Also, the stock has a VGM Score of A.
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