Patterson-UTI Energy’s Cash Flows and Capex: The Trend, the Plan
Are Patterson-UTI Energy Shares Ahead of Its Fundamentals?
Patterson-UTI Energy’s operating cash flows and capex
In this part of our series, we’ll see how Patterson-UTI Energy’s (PTEN) operating cash flows have trended over the past few quarters. We’ll also see how its FCF (free cash flow) was affected, given its capex (capital expenditures).
Patterson-UTI Energy’s CFO (cash flow from operating activities) increased 19% in fiscal 4Q15 over fiscal 4Q14. PTEN generated $193 million CFO in fiscal 4Q15. Despite lower revenues in the past one year, better working capital management led to higher CFO. PTEN’s fiscal 4Q15 CFO also improved over fiscal 3Q15.
Patterson-UTI Energy’s free cash flow
PTEN’s capex decreased 51% in the past one year until fiscal 4Q15. Lower capex combined with higher CFO led to FCF improving significantly in the past one year. In fiscal 4Q15, PTEN’s FCF was $58 million compared to -$116 million a year ago. This was also an improvement over fiscal 3Q15 when PTEN’s FCF was $21 million. PTEN’s FCF has been positive in nine out of the past 12 quarters.
In comparison, Superior Energy Services (SPN) saw a 69% FCF decline in fiscal 4Q15 over fiscal 4Q14. SPN is PTEN’s lower market cap peer. It generated FCF of $27.8 million in fiscal 4Q15. C&J Energy Services’ (CJES) fiscal 4Q15 FCF was -$24 million. Carbo Ceramics’ (CRR) fiscal 4Q15 FCF was -$9 million. PTEN is 0.17% of the SPDR S&P MidCap 400 ETF (MDY).
Patterson-UTI Energy’s 2016 capex plan
Patterson-UTI Energy’s capex budget for 2016 is $190 million, which is significantly lower than 2015. PTEN plans to spend $115 million of its fiscal 2016 capex on contract drilling and $60 million on pressure pumping–related activities.
In the next part, we’ll look at Patterson-UTI Energy’s dividends and dividend yields.
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