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Patterson-UTI Energy, Inc. PTEN reported net loss per share of 14 cents, narrower than the Zacks Consensus Estimate and the year-ago losses of 21 cents and 16 cents, respectively. The better-than-expected bottom line reflects strong performance from its Contract Drilling segment.
Revenues of $704.2 million beat the Zacks Consensus Estimate of $697 million but fell 13% from the year-ago quarter on lower completion activity that impacted the Pressure Pumping unit.
Segmental Performance
Contract Drilling: This segment’s revenues totaled $372.4 million, up 13.6% year over year. Average rig revenues per operating day increased to $23,590 from $21,540 in the first quarter of 2018, while average daily rig operating edged down slightly. As a result, average rig margin per day improved 28.1% from year over year to $9,700 – the highest since early 2016.
The segment was also boosted by rise in both the operating days (from 15,218 to 15,787) and the number of rigs operational (from 169 to 175). Consequently, the segment recorded operating income of $21.2 million – turning around from the loss of $17.1 million in the year-earlier quarter.
Pressure Pumping: Revenues of $247.6 million dropped 39.1% from the year-ago sales of $406.8 million. Moreover, the segment reported a loss of $18.8 million against income of $25.4 million in the prior-year quarter. Reduced completion activity and pricing pressure led to the deterioration.
Directional Drilling: The unit’s revenues totaled $53 million, up 8.9% year over year. However, the segment recorded operating loss of $5.7 million, wider than the year-ago loss of $4.9 million on decreasing activity.
Other Operations: Revenues came in at $31.2 million compared to $26 million in the year-ago quarter. However, the unit incurred a wider quarterly loss of $5.2 million, as against the loss of $4.1 million recorded in year-ago quarter. The deterioration was mainly on account of rise in direct operating costs – from $17.7 million to $21.8 million.
Capital Expenditure & Financial Position
During the quarter, Patterson-UTI spent approximately $118.3 million on capital programs (as against $122.9 million in the first quarter of 2018). As of Mar 31, 2019, Patterson-UTI had $248.9 million in cash and cash equivalents and $1.1 billion in long-term debt. The company also informed that it repurchased 5.4 million shares during the quarter for $75 million and shelled out $8.5 million as dividends.
Guidance & Outlook
Patterson-UTI management said that drilling and completion activities are yet to recover from the effects of the low year-end crude prices that prompted the upstream companies to be conservative with their investment budgets. As a result, demand has failed to take off despite the significant rebound in commodity prices.