Patterson-UTI (PTEN) Earnings & Sales Beat Estimates in Q3
Patterson-UTI Energy PTEN reported a third-quarter 2022 adjusted net profit of 28 cents per share, beating the Zacks Consensus Estimate of a profit of 19 cents. This outperformance can be attributed to third-quarter revenues beating the consensus mark due to solid segmental performances.
Moreover, the profit beat the year-ago quarter's loss of 44 cents per share on accelerated rig activity and much higher energy prices.
The company’s total quarterly revenues of $727.5 million outperformed the Zacks Consensus Estimate of $684 million. Moreover, the top line improved by an impressive 103.3% on a year-over-year basis.
In good news for investors, Patterson-UTI doubled its quarterly cash dividend to 8 cents per share from the previous 4-cent payout. The dividend will be paid out on Dec 15, 2022 to shareholders of record as of Dec 1, 2022. Moreover, PTEN also increased its share repurchase authorization to $300 million.
PattersonUTI Energy, Inc. Price, Consensus and EPS Surprise
PattersonUTI Energy, Inc. price-consensus-eps-surprise-chart | PattersonUTI Energy, Inc. Quote
Segmental Performances
Contract Drilling: Revenues totaled $356 million, up by 125.5% from the last year’s third-quarter figure of $157.9 million due to continued day rate pricing momentum, contract renewals and increasing activity.
The unit posted an operating profit of $43.3 million in the third quarter, outperforming the year-ago loss of $51.8 million due to favorable pricing.
Pressure Pumping: Revenues of $287.7 million rose about 88.5% from the year-ago figure of $152.6 million due to better pricing.
Moreover, the segment posted an operating profit of $48.9 million compared to a loss of $13.7 million in the third quarter of 2021. The profit is attributable to active spreads being highly utilized in the reported quarter and better customer pricing.
Directional Drilling: Revenues summed at $58.9 million, up 85.5% year over year from the last year’s figure of $31.7 million due to higher activity and more favorable pricing. Moreover, the segment posted an operating profit of $4.4 million against a loss of $4.6 million reported in the corresponding quarter of 2021.
Other Operations: Revenues were $24.9 million, up about 59.8% more than the year-ago quarter’s $15.6 million as activity levels improved. The unit also posted a quarterly profit of $2.6 million compared to a loss of $1.3 million recorded in the year-ago quarter.
Capital Expenditure & Financial Position
In the third quarter of 2022, PTEN spent $126.35 million on capital programs (compared with $34.26 million in the third quarter of 2021). As of Sep 30, 2022, the company had $42.7 million of cash and cash equivalents and $852.9 million as long-term debt.
Outlook
For the fourth quarter, Patterson-UTI anticipates incremental pricing gains with activity levels slightly higher than the third quarter, with fourth-quarter revenue estimates of $61 million.
Based on contracts currently in place, Patterson-UTI expects its fourth-quarter 2022 rig count to average 81 rigs under term contracts. As the onshore driller foresees a ramp-up in drilling activity, it expects the third-quarter rig count to be 132 rigs, on average.
For 2022, PTEN anticipates its adjusted EBITDA to be more than $650 million, an update from the earlier guidance of $600 million. The company also increased its Capex forecast from $390 million to $425 million.
Zacks Rank & Key Picks
Patterson-UTI currently sports a Zacks Rank #1 (Strong Buy). Investors interested in the energy space might also look at some other top-ranked stocks — Par Pacific PARR, NexTier Oilfield Solutions NEX and Murphy USA MUSA — each sporting a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Par Pacific’s 2022 earnings stands at $5.74 per share, which indicates an increase of about 433.7% from the year-ago loss of $1.72.
The consensus mark for PARR’s 2022 earnings has been revised upward three times over the past 60 days from $4.03 to $5.74 per share.
The Zacks Consensus Estimate for NexTier’s 2022 earnings stands at $1.40 per share, indicating an increase of about 425.6% from the year-ago loss of 43 cents.
NEX beat estimates for earnings in all the trailing four quarters, the average being around 271%.
The Zacks Consensus Estimate for Murphy USA’s 2022 EPS has been revised upward by about 11.35% over the past 60 days from $22.81 to $25.40.
MUSA beat the consensus mark for earnings in all the trailing four quarters, the average being approximately 51%.
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