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Patterson-UTI (PTEN) Q2 Earnings In Line, Revenues Rise Y/Y
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Patterson-UTI Energy (PTEN - Free Report) reported a second-quarter 2023 adjusted net profit of 44 cents per share, which was in line with the Zacks Consensus Estimate. The figure improved from the year-ago quarter's level of 5 cents per share. This outperformance can be attributed to impressive performance from the Contract Drilling Segment.
Total revenues of $758.9 million missed the Zacks Consensus Estimate of $780 million. This can be attributed to lower-than-expected performances of PTEN’s Pressure Pumping, Directional Drilling and Other Operations segments. However, the top line improved 22% on a year-over-year basis.
Patterson-UTI will pay its quarterly dividend of 8 cents per share on Sep 21, 2023, to shareholders of record as of Sep 7, 2023. Moreover, the company repurchased 1.8 million shares during the second quarter, bringing the program's total share repurchase amount through the first half of 2023 to 7.4 million. PTEN distributed about $126 million in cash to shareholders through the first half of 2023, including $33.5 million in dividends. Its share repurchase authorization had $281 million left as of Jun 30, 2023.
Patterson-UTI Energy, Inc. Price, Consensus and EPS Surprise
Contract Drilling: Revenues totaled $432.4 million, up 42% from the prior-year quarter’s figure of $304.6 million. The figure beat our projection of $422.2 million. This was due to the continued renewal of drilling rig contracts. Operating profit amounted to $113.3 million compared with $21.7 million in the second quarter of 2022. The figure also beat our estimate of $108.5 million.
Pressure Pumping: Revenues of $250.2 million rose about 4.9% from the year-ago quarter’s figure of $238.4 million due to better pricing. The figure missed our projection of $276.9 million.
Operating profit totaled $25.3 million compared with $20.1 million in the second quarter of 2022 due to better pricing. The figure missed our estimate of $36.5 million.
Directional Drilling: Revenues totaled $55.1 million, up 0.5% from the prior-year quarter’s figure of $54.8 million but missed our projection of $57.3 million.
Operating profit amounted to $1.3 million compared with $4 million in the corresponding quarter of 2022. The figure missed our estimate of $3.5 million. The underperformance can be attributed to lower activity levels.
Other Operations: Revenues amounted to $21.1 million, 13.9% lower than the year-ago quarter’s figure of $24.5 million. The figure also missed our projection of $23.5 million. The unit also reported a loss of $2 million against a profit of $3.3 per share in the year-ago quarter. The figure missed our estimate of a profit of $1.2 million.
Capital Expenditure & Financial Position
In the reported quarter, PTEN spent $132.394 million on capital programs compared with $96.370 million in the prior-year period. As of Jun 30, 2023, the company had cash and cash equivalents worth $150,288 million and long-term debt of $822,408 million.
Outlook
Patterson-UTI expects rig count and frac activity to improve later in the year and in 2024, driven by strong oil and natural gas prices.
PTEN expects capital expenditures of $485 million in the second half of 2023, with $280 million going toward contract drilling, $140 million toward pressure pumping, $20 million toward directional drilling, and $45 million toward other businesses and general corporate needs.
The company projects an average of 71 rigs to operate under term contracts during the third quarter of 2023 and an average of 44 rigs to operate under term contracts over the four quarters ending Jun 30, 2024.
Patterson-UTI anticipates pressure pumping revenues of approximately $230 million for the third quarter, with an adjusted gross margin of $37 million.
It expects pumping activity to increase to 12 spreads in the fourth quarter, with an increasing number of dual fuel spreads to take advantage and further boost completion activity in 2024.
Patterson-UTI projects an average rig count of approximately 119 for the third quarter in the United States.
Evolution Petroleum is worth approximately $307.07 million. EPM currently pays a dividend of 48 cents per share, or 5.20% on an annual basis.
The company currently has a forward P/E ratio of 8.55. In comparison, its industry has an average forward P/E of 13.40, which means EPM is trading at a discount to the group.
Murphy USA is valued at around $6.58 billion. In the past year, its shares have risen 5.8%
MUSA currently pays a dividend of $1.52 per share, or 0.50% on an annual basis. Its payout ratio currently sits at 6% of earnings.
NGL Energy Partners is valued at around $535.63 million. In the past year, its units have risen 149.1%.
The partnership currently has a forward P/E ratio of 4.67. In comparison, its industry has an average forward P/E of 16.20, which means NGL is trading at a discount to the group.
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Patterson-UTI (PTEN) Q2 Earnings In Line, Revenues Rise Y/Y
Patterson-UTI Energy (PTEN - Free Report) reported a second-quarter 2023 adjusted net profit of 44 cents per share, which was in line with the Zacks Consensus Estimate. The figure improved from the year-ago quarter's level of 5 cents per share. This outperformance can be attributed to impressive performance from the Contract Drilling Segment.
Total revenues of $758.9 million missed the Zacks Consensus Estimate of $780 million. This can be attributed to lower-than-expected performances of PTEN’s Pressure Pumping, Directional Drilling and Other Operations segments. However, the top line improved 22% on a year-over-year basis.
Patterson-UTI will pay its quarterly dividend of 8 cents per share on Sep 21, 2023, to shareholders of record as of Sep 7, 2023. Moreover, the company repurchased 1.8 million shares during the second quarter, bringing the program's total share repurchase amount through the first half of 2023 to 7.4 million. PTEN distributed about $126 million in cash to shareholders through the first half of 2023, including $33.5 million in dividends. Its share repurchase authorization had $281 million left as of Jun 30, 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 $432.4 million, up 42% from the prior-year quarter’s figure of $304.6 million. The figure beat our projection of $422.2 million. This was due to the continued renewal of drilling rig contracts. Operating profit amounted to $113.3 million compared with $21.7 million in the second quarter of 2022. The figure also beat our estimate of $108.5 million.
Pressure Pumping: Revenues of $250.2 million rose about 4.9% from the year-ago quarter’s figure of $238.4 million due to better pricing. The figure missed our projection of $276.9 million.
Operating profit totaled $25.3 million compared with $20.1 million in the second quarter of 2022 due to better pricing. The figure missed our estimate of $36.5 million.
Directional Drilling: Revenues totaled $55.1 million, up 0.5% from the prior-year quarter’s figure of $54.8 million but missed our projection of $57.3 million.
Operating profit amounted to $1.3 million compared with $4 million in the corresponding quarter of 2022. The figure missed our estimate of $3.5 million. The underperformance can be attributed to lower activity levels.
Other Operations: Revenues amounted to $21.1 million, 13.9% lower than the year-ago quarter’s figure of $24.5 million. The figure also missed our projection of $23.5 million. The unit also reported a loss of $2 million against a profit of $3.3 per share in the year-ago quarter. The figure missed our estimate of a profit of $1.2 million.
Capital Expenditure & Financial Position
In the reported quarter, PTEN spent $132.394 million on capital programs compared with $96.370 million in the prior-year period. As of Jun 30, 2023, the company had cash and cash equivalents worth $150,288 million and long-term debt of $822,408 million.
Outlook
Patterson-UTI expects rig count and frac activity to improve later in the year and in 2024, driven by strong oil and natural gas prices.
PTEN expects capital expenditures of $485 million in the second half of 2023, with $280 million going toward contract drilling, $140 million toward pressure pumping, $20 million toward directional drilling, and $45 million toward other businesses and general corporate needs.
The company projects an average of 71 rigs to operate under term contracts during the third quarter of 2023 and an average of 44 rigs to operate under term contracts over the four quarters ending Jun 30, 2024.
Patterson-UTI anticipates pressure pumping revenues of approximately $230 million for the third quarter, with an adjusted gross margin of $37 million.
It expects pumping activity to increase to 12 spreads in the fourth quarter, with an increasing number of dual fuel spreads to take advantage and further boost completion activity in 2024.
Patterson-UTI projects an average rig count of approximately 119 for the third quarter in the United States.
Zacks Rank and Key Picks
Currently, PTEN carries a Zacks Rank #3 (Hold).
Some better-ranked stocks for investors interested in the energy sector are Evolution Petroleum (EPM - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and Murphy USA (MUSA - Free Report) and NGL Energy Partners (NGL - Free Report) , both carrying a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Evolution Petroleum is worth approximately $307.07 million. EPM currently pays a dividend of 48 cents per share, or 5.20% on an annual basis.
The company currently has a forward P/E ratio of 8.55. In comparison, its industry has an average forward P/E of 13.40, which means EPM is trading at a discount to the group.
Murphy USA is valued at around $6.58 billion. In the past year, its shares have risen 5.8%
MUSA currently pays a dividend of $1.52 per share, or 0.50% on an annual basis. Its payout ratio currently sits at 6% of earnings.
NGL Energy Partners is valued at around $535.63 million. In the past year, its units have risen 149.1%.
The partnership currently has a forward P/E ratio of 4.67. In comparison, its industry has an average forward P/E of 16.20, which means NGL is trading at a discount to the group.