Patterson-UTI's (PTEN) Q4 Earnings & Sales Beat Estimates
Patterson-UTI Energy, Inc. PTEN reported fourth-quarter 2022 net profit of 46 cents per share, beating the Zacks Consensus Estimate of a profit of 43 cents and turning around from the year-ago quarter's loss of 38 cents per share. This outperformance can be attributed to fourth-quarter revenues beating the consensus mark due to strong performance of contract drilling, pressure pumping, directional drilling and other segmental operations.
The company’s total quarterly revenues of $788.5 million outperformed the Zacks Consensus Estimate of $760 million. The top line also improved by an impressive 69% on a year-over-year basis.
Patterson-UTI, a leading provider of oilfield services and products to oil and natural gas exploration and production companies, declared a quarterly cash dividend payout of 8 cents per share. The dividend will be paid out on Mar 16, 2023, to shareholders of record as of Mar 2, 2023.
Patterson-UTI Energy, Inc. Price, Consensus and EPS Surprise
Patterson-UTI Energy, Inc. price-consensus-eps-surprise-chart | Patterson-UTI Energy, Inc. Quote
Segmental Performances
Contract Drilling: Revenues totaled $399.4 million, up 73% from the year-ago quarter’s figure of $230.9 million. It also beat the Zacks Consensus Estimate of $378 million due to continued day rate pricing momentum, contract renewals and increasing activity.
The unit posted an operating profit of $78.2 million in the fourth quarter against the year-ago loss of $264.3 million due to favorable pricing.
Pressure Pumping: Revenues of $306.8 million rose about 67.4% from the year-ago figure of $183.3 million due to good pricing. It also beat the Zacks Consensus Estimate of $270 million.
Moreover, the segment posted an operating profit of $58.6 million compared to a loss of $41.4 million in the fourth quarter of 2021. The profit is attributable to high utilization of active spreads in the reported quarter, minimal holiday-related downtime and better pricing.
Directional Drilling: Revenues totaled $59.5 million, up 68.8% from the last year’s figure of $35.2 million due to higher activity and more favorable pricing. The segment also posted an operating profit of $5.3 million against a loss of $20.7 million reported in the corresponding quarter of 2021, as it veered toward more high-margin work.
Other Operations: Revenues came in at $22.8 million, up about 33.4% from the year-ago quarter’s $17.1 million. The unit also posted a quarterly profit of $1.1 million compared to a loss of $727,000 in the year-ago quarter.
Capital Expenditure & Financial Position
In the fourth quarter of 2022, PTEN spent $119.2 million on capital programs (compared with $76.2 million in the fourth quarter of 2021). As of Dec 31, 2022, the company had $137.6 million of cash and cash equivalents and $830.9 million as long-term debt.
During the fourth quarter of 2022, Patterson-UTI Energy repurchased 3.3 million shares of common stock for an aggregate of $57.2 million.
Outlook
In the first quarter of 2023, Patterson-UTI expects revenues of $280 million from pressure pumping, $9 million from contract drilling, $54 million from Directional Drilling, and $22.8 million from other operations.
It also estimates the rig count to average 130 rigs in the United States and then gradually increase throughout the year due to strong demand for Tier-1 and availability of super-spec rigs.
The capital expenditure for 2023 is expected at $550 million. PTEN aims to return half of the free cash flow generated to shareholders through dividends and share repurchases.
Zacks Rank and Key Picks
Currently, Patterson-UTI Energy, Inc. carries a Zacks Rank #3 (Hold). Meanwhile, investors interested in the energy sector might look at some better-performing stocks like ProPetro Holding PUMP and Energy Transfer ET both sporting a Zacks Rank #1 (Strong Buy) and Helmerich & Payne (HP) holding a Zacks Rank #2 (Buy).You can see the complete list of today’s Zacks #1 Rank stocks here.
ProPetro Holding: PUMP currently has a forward P/E ratio of 4.49. In comparison, its industry has an average forward P/E of 25.60, which means PUMP is trading at a discount to the group.
ProPetro Holding is worth approximately $1.14 billion. Its shares have declined 19.9% in the past year.
Energy Transfer LP: Energy Transfer LP is valued at around $39.66 billion. ET delivered an average earnings surprise of 28.7% for the last four quarters, and its current dividend yield is 9.50%.
Energy Transfer LP currently has a forward P/E ratio of 8.95. In comparison, its industry has an average forward P/E of 14.20, which means Energy Transfer LP is trading at a discount to the group.
Helmerich & Payne: Helmerich & Payne is valued at around $4.78 billion. Helmerich & Payne, headquartered in Tulsa, OK, has a trailing four-quarter earnings surprise of roughly 130.98% on average.
Over the past 60 days, the Zacks Consensus Estimate for HP's fiscal 2023 earnings has been revised by 18.8%. In the past year, HP stock has increased by 34.7%.
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