A month has gone by since the last earnings report for Patterson-UTI (PTEN Quick QuotePTEN - Free Report) . Shares have added about 4.9% in that time frame, outperforming the S&P 500.

Will the recent positive trend continue leading up to its next earnings release, or is Patterson-UTI due for a pullback? 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 drivers.

Patterson-UTI Q3 Earnings Miss, Sales Beat

Patterson-UTI Energy reported third-quarter 2024 breakeven earnings per share, which missed the Zacks Consensus Estimate of a cent. The bottom line declined from the year-ago quarter's level of 20 cents. This year-over-year deterioration was mainly due to poor contribution from the Drilling Services, Completion Services and Other Services segments.

Total revenues of $1357 million beat the Zacks Consensus Estimate of $1289 million. The top line also increased 34.2% year over year. This outperformance can be attributed to Completion Services segment's increased year-over-year revenue contribution.

In the quarter, the company recorded Adjusted EBITDA of $275 million, excluding goodwill impairment, asset retirement charges and merger and integration expenses.

PTEN returned $71 million to its shareholders in the third quarter. In this quarter alone, it utilized $40 million to repurchase more than 4 million shares. Since the close of the NexTier merger and Ulterra acquisition, the company has returned $475 million to its shareholders, including $346 million in share repurchases. As of Sept. 30, there is $780 million remaining in share repurchase authorization.

This leading provider of oilfield services and products to oil and natural gas exploration and production companies will pay its quarterly dividend of 8 cents per share on Dec. 16, 2024, to the company’s shareholders of record as of Dec. 2.

Segmental Performances of Patterson-UTI

Drilling Services: Revenues in this segment totaled $422 million, down 13.7% from the prior-year quarter’s figure of $488.8 million. However, the top line beat our projection of $370.1 million.

Operating loss amounted to $34 million compared with operating profit of $114.7 million in the third quarter of 2023. The figure also missed our operating profit estimate of $69.8 million. The company secured approximately $401 million in term contracts for the U.S. drilling rigs as of Sept. 30, 2024.

Completion Services: This segment’s revenues of $832 million rose about 81% from the year-ago quarter’s figure of $459.6 million. Moreover, the metric beat our projection of $814 million.

Operating loss totaled $909 million compared with operating profit of $0.2 million in the third quarter of 2023. Additionally, the figure missed our operating profit estimate of $24.4 million.

Drilling Products:  This segment’s revenues of $89 million rose about 91% from the year-ago quarter’s figure of $46.6 million. Additionally, the amount marginally beat our projection of $88 million.

Operating profit totaled $9 million compared with an operating loss of $6.2 million in the third quarter of 2023. Additionally, the figure beat our operating loss estimate of $13.1 million.

Following the Ulterra acquisition, the company has boosted its market share in rigs operated by the U.S. Contract Drilling business by more than 10%.

Other Services: Revenues amounted to $15 million, 13.2% lower than the year-ago quarter’s figure of $16.5 million.  Additionally, the figure missed our projection of $16.5 million.

Operating loss amounted to $4 million compared with an operating profit of $0.4 million in the third quarter of 2023. The figure missed our projection of an operating profit of $0.7 million.

PTEN’s Capital Expenditure & Financial Position

In the reported quarter, PTEN spent $181 million on capital programs compared with $160.4 million in the prior year period.

As of Sept. 30, 2024, the company had cash and cash equivalents worth $115 million and long-term debt of $1.2 billion. The company’s debt-to-capitalization was 25%.

The company generated $860 million in cash from operations and $321.7 million in free cash flow.

How Have Estimates Been Moving Since Then?

It turns out, fresh estimates have trended downward during the past month.

The consensus estimate has shifted -357.14% due to these changes.

VGM Scores

At this time, Patterson-UTI has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, 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 is part of the Zacks Oil and Gas - Drilling industry. Over the past month, Nabors Industries (NBR Quick QuoteNBR - Free Report) , a stock from the same industry, has gained 3.4%. The company reported its results for the quarter ended September 2024 more than a month ago.

Nabors reported revenues of $731.81 million in the last reported quarter, representing a year-over-year change of -1.7%. EPS of -$3.35 for the same period compares with -$5.40 a year ago.

For the current quarter, Nabors is expected to post a loss of $1.71 per share, indicating a change of +55.5% from the year-ago quarter. The Zacks Consensus Estimate has changed -42.7% over the last 30 days.

The overall direction and magnitude of estimate revisions translate into a Zacks Rank #4 (Sell) for Nabors. Also, the stock has a VGM Score of A.