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Patterson-UTI Energy's Q4 Earnings Fall Y/Y, Sales Lag Estimates
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Patterson-UTI Energy, Inc. (PTEN - Free Report) reported a fourth-quarter 2024 adjusted net loss of 12 cents per share, which was wider than the Zacks Consensus Estimate of a 10-cent loss. The bottom line declined from the year-ago quarter's level of 19 cents. This year-over-year deterioration was mainly due to poor contribution from the Drilling Services and Completion Services segments.
Total revenues of $1.2 billion missed the Zacks Consensus Estimate by 4.2%. Additionally, the top line decreased 26.6% year over year. This underperformance can be attributed to the decrease in year-over-year revenue contribution from its segments.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
In the quarter, the company recorded adjusted EBITDA of $225 million, excluding goodwill impairment, asset retirement charges and merger and integration expenses.
PTEN’s board of directors declared a quarterly dividend of 8 cents per share to its common shareholders of record as of March 3. The payout, which is unchanged from the previous quarter, will be made on March 20.
PTEN returned $52 million to its shareholders in the fourth quarter and $417 million in 2024. It used $20 million to repurchase 2.6 million shares in the fourth quarter and for the full year, $290 million was allocated. As of Dec. 31, 2024, there was $759 million remaining in the share repurchase authorization.
Patterson-UTI Energy, Inc. Price, Consensus and EPS Surprise
Drilling Services: Revenues in this segment totaled $408 million, down 12% from the prior-year quarter’s figure of $463.6 million. However, the top line beat our estimation of $364.4 million.
Operating income amounted to $73 million compared with $92.7 million in the fourth quarter of 2023. The figure also missed our operating income estimate of $39.7 million. The company secured approximately $426 million in term contracts for the U.S. drilling rigs as of Dec. 31, 2024.
Completion Services: This segment’s revenues of $651 million drops about 35.8% from the year-ago quarter’s figure of $1,014.4 million. Moreover, the metric missed our estimation of $736.5 million.
Operating loss totaled $50.2 million against operating profit of $70.3 million in the fourth quarter of 2023. Additionally, the figure was lower than our operating profit estimate of $43.3 million.
Drilling Products: This segment’s revenues of $86.5 million declined about 1.8% from the year-ago quarter’s figure of $88.1 million. Additionally, the amount missed our estimation of $89.4 million.
Operating profit reached $0.3 million, indicating a 23% decrease compared with the fourth quarter of 2023. However, the number beat our operating loss estimate of $2.6 million.
Other Services: Revenues amounted to $16.4 million, 10.4% lower than the year-ago quarter’s figure of $18.3 million. However, the figure beat our estimation of $15.1 million.
Operating income amounted to $2.1 million compared with $1 million in the fourth- quarter of 2023. The figure beat our estimation of an operating loss of $1.2 million.
PTEN’s Capital Expenditure & Financial Position
In the reported quarter, PTEN spent $140.4 million on capital programs compared with $205.3 million in the prior year period.
As of Dec. 31, 2024, the company had cash and cash equivalents worth $241 million and long-term debt of $1219 million. The company’s debt-to-capitalization was 26%.
This Zacks Rank #3 (Hold) company generated $1.2 billion in cash from operations and $525 million in free cash flow.
The company expects a strong start in its Drilling Services segment, with U.S. Contract Drilling operating an average of 106 rigs in the first quarter. The adjusted gross profit per operating day is expected to be approximately $15,250. Management anticipates that aside from U.S. Contract Drilling, adjusted gross profit from other Drilling Services will remain steady in the first quarter, aligning with the previous quarter's performance.
In the Completion Services segment, the company believes a seasonal boost in activity will occur as customer budgets reset with the start of 2025. While the recovery is expected, inefficiencies from crew restarts following the extended slowdown in the fourth quarter may temper the pace. Despite this, the company expects adjusted gross profit to reach about $100 million in the first quarter. Additionally, management expects equipment powered by natural gas to remain in high demand and effectively sold out well into second-quarter 2025.
Turning to the Drilling Products segment, the company forecasts flat adjusted gross profit for the first quarter compared with the previous quarter. Management is optimistic about a boost in international revenues for drill bits and downhole tools in 2025 as the company continues to expand into new geographies.
For Other revenues, the company expects adjusted gross profit to remain stable, in line with the performance of fourth-quarter 2024.
Looking at expenses, the company expects selling, general and administrative costs to be approximately $67 million for the first quarter. PTEN’s depreciation, depletion, amortization and impairment expenses are estimated at around $235 million.
Finally, for 2025, management anticipates capital expenditures to total roughly $600 million, with each segment planning for lower capital expenditures than in 2024.
Important Earnings at a Glance
While we have discussed PTEN’s fourth-quarter results in detail, let us take a look at three other key reports of this space.
Oil and gas equipment and services provider Liberty Energy (LBRT - Free Report) reported a fourth-quarter 2024 adjusted net income of 10 cents per share, which marginally beat the Zacks Consensus Estimate of 9 cents, due to a year-over-year decrease in costs and expenses. However, the bottom line underperformed the year-ago quarter’s reported figure of 54 cents, due to poor equipment and service execution, along with lower activity.
As of Dec. 31, Liberty had approximately $20 million in cash and cash equivalents. The pressure pumper’s long-term debt of $190.5 million represented a debt-to-capitalization of 8.8%.
Another oil and gas equipment and services provider Halliburton Company (HAL - Free Report) posted a fourth-quarter 2024 adjusted net income per share of 70 cents, same as the Zacks Consensus Estimate but below the year-ago quarter’s profit of 86 cents (adjusted). The numbers indicated softer activity in the region of North America, partly offset by improved fluid work in the Gulf of Mexico.
As of Dec. 31, 2024, the company had approximately $2.6 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. The company generated $1.5 billion of cash flow from operations in the fourth quarter, leading to a free cash flow of $1.1 billion.
Energy infrastructure provider Kinder Morgan (KMI - Free Report) reported fourth-quarter adjusted earnings per share of 32 cents, shy of the Zacks Consensus Estimate of 33 cents. The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures and lower crude, CO2 and NGL volumes. KMI’s fourth-quarter DCF was $1.3 billion, up from $1.2 billion a year ago.
As of Dec. 31, 2024, Kinder Morgan reported $88 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For 2025, Kinder Morgan anticipates a net income of $2.8 billion, up 8% from the prior-year level, and an adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates budgeted adjusted EBITDA of $8.3 billion, up 4% from the previous-year level.
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Patterson-UTI Energy's Q4 Earnings Fall Y/Y, Sales Lag Estimates
Patterson-UTI Energy, Inc. (PTEN - Free Report) reported a fourth-quarter 2024 adjusted net loss of 12 cents per share, which was wider than the Zacks Consensus Estimate of a 10-cent loss. The bottom line declined from the year-ago quarter's level of 19 cents. This year-over-year deterioration was mainly due to poor contribution from the Drilling Services and Completion Services segments.
Total revenues of $1.2 billion missed the Zacks Consensus Estimate by 4.2%. Additionally, the top line decreased 26.6% year over year. This underperformance can be attributed to the decrease in year-over-year revenue contribution from its segments.
Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
In the quarter, the company recorded adjusted EBITDA of $225 million, excluding goodwill impairment, asset retirement charges and merger and integration expenses.
PTEN’s board of directors declared a quarterly dividend of 8 cents per share to its common shareholders of record as of March 3. The payout, which is unchanged from the previous quarter, will be made on March 20.
PTEN returned $52 million to its shareholders in the fourth quarter and $417 million in 2024. It used $20 million to repurchase 2.6 million shares in the fourth quarter and for the full year, $290 million was allocated. As of Dec. 31, 2024, there was $759 million remaining in the share repurchase authorization.
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 of Patterson
Drilling Services: Revenues in this segment totaled $408 million, down 12% from the prior-year quarter’s figure of $463.6 million. However, the top line beat our estimation of $364.4 million.
Operating income amounted to $73 million compared with $92.7 million in the fourth quarter of 2023. The figure also missed our operating income estimate of $39.7 million. The company secured approximately $426 million in term contracts for the U.S. drilling rigs as of Dec. 31, 2024.
Completion Services: This segment’s revenues of $651 million drops about 35.8% from the year-ago quarter’s figure of $1,014.4 million. Moreover, the metric missed our estimation of $736.5 million.
Operating loss totaled $50.2 million against operating profit of $70.3 million in the fourth quarter of 2023. Additionally, the figure was lower than our operating profit estimate of $43.3 million.
Drilling Products: This segment’s revenues of $86.5 million declined about 1.8% from the year-ago quarter’s figure of $88.1 million. Additionally, the amount missed our estimation of $89.4 million.
Operating profit reached $0.3 million, indicating a 23% decrease compared with the fourth quarter of 2023. However, the number beat our operating loss estimate of $2.6 million.
Other Services: Revenues amounted to $16.4 million, 10.4% lower than the year-ago quarter’s figure of $18.3 million. However, the figure beat our estimation of $15.1 million.
Operating income amounted to $2.1 million compared with $1 million in the fourth- quarter of 2023. The figure beat our estimation of an operating loss of $1.2 million.
PTEN’s Capital Expenditure & Financial Position
In the reported quarter, PTEN spent $140.4 million on capital programs compared with $205.3 million in the prior year period.
As of Dec. 31, 2024, the company had cash and cash equivalents worth $241 million and long-term debt of $1219 million. The company’s debt-to-capitalization was 26%.
This Zacks Rank #3 (Hold) company generated $1.2 billion in cash from operations and $525 million in free cash flow.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Patterson’s Outlook
The company expects a strong start in its Drilling Services segment, with U.S. Contract Drilling operating an average of 106 rigs in the first quarter. The adjusted gross profit per operating day is expected to be approximately $15,250. Management anticipates that aside from U.S. Contract Drilling, adjusted gross profit from other Drilling Services will remain steady in the first quarter, aligning with the previous quarter's performance.
In the Completion Services segment, the company believes a seasonal boost in activity will occur as customer budgets reset with the start of 2025. While the recovery is expected, inefficiencies from crew restarts following the extended slowdown in the fourth quarter may temper the pace. Despite this, the company expects adjusted gross profit to reach about $100 million in the first quarter. Additionally, management expects equipment powered by natural gas to remain in high demand and effectively sold out well into second-quarter 2025.
Turning to the Drilling Products segment, the company forecasts flat adjusted gross profit for the first quarter compared with the previous quarter. Management is optimistic about a boost in international revenues for drill bits and downhole tools in 2025 as the company continues to expand into new geographies.
For Other revenues, the company expects adjusted gross profit to remain stable, in line with the performance of fourth-quarter 2024.
Looking at expenses, the company expects selling, general and administrative costs to be approximately $67 million for the first quarter. PTEN’s depreciation, depletion, amortization and impairment expenses are estimated at around $235 million.
Finally, for 2025, management anticipates capital expenditures to total roughly $600 million, with each segment planning for lower capital expenditures than in 2024.
Important Earnings at a Glance
While we have discussed PTEN’s fourth-quarter results in detail, let us take a look at three other key reports of this space.
Oil and gas equipment and services provider Liberty Energy (LBRT - Free Report) reported a fourth-quarter 2024 adjusted net income of 10 cents per share, which marginally beat the Zacks Consensus Estimate of 9 cents, due to a year-over-year decrease in costs and expenses. However, the bottom line underperformed the year-ago quarter’s reported figure of 54 cents, due to poor equipment and service execution, along with lower activity.
As of Dec. 31, Liberty had approximately $20 million in cash and cash equivalents. The pressure pumper’s long-term debt of $190.5 million represented a debt-to-capitalization of 8.8%.
Another oil and gas equipment and services provider Halliburton Company (HAL - Free Report) posted a fourth-quarter 2024 adjusted net income per share of 70 cents, same as the Zacks Consensus Estimate but below the year-ago quarter’s profit of 86 cents (adjusted). The numbers indicated softer activity in the region of North America, partly offset by improved fluid work in the Gulf of Mexico.
As of Dec. 31, 2024, the company had approximately $2.6 billion in cash/cash equivalents and $7.2 billion in long-term debt, representing a debt-to-capitalization ratio of 40.4. The company generated $1.5 billion of cash flow from operations in the fourth quarter, leading to a free cash flow of $1.1 billion.
Energy infrastructure provider Kinder Morgan (KMI - Free Report) reported fourth-quarter adjusted earnings per share of 32 cents, shy of the Zacks Consensus Estimate of 33 cents. The lower-than-expected quarterly earnings were primarily due to decreased volumes on certain systems, asset divestitures and lower crude, CO2 and NGL volumes. KMI’s fourth-quarter DCF was $1.3 billion, up from $1.2 billion a year ago.
As of Dec. 31, 2024, Kinder Morgan reported $88 million in cash and cash equivalents. Its long-term debt amounted to $29.8 billion at the quarter-end. For 2025, Kinder Morgan anticipates a net income of $2.8 billion, up 8% from the prior-year level, and an adjusted EPS of $1.27, up 10%. The company expects to declare dividends of $1.17 per share, up 2% from the prior-year figure. It also anticipates budgeted adjusted EBITDA of $8.3 billion, up 4% from the previous-year level.