Patterson-UTI Energy Inc.
), one of the largest onshore contract drillers in the U.S.,
reported better-than-expected fourth-quarter 2012 results. The
outperformance was primarily driven by the pressure pumping
operations, which held up well despite adverse market conditions.
The company's earnings per share (EPS) came in at 40 cents, way
ahead of the Zacks Consensus Estimate of 29 cents. Quarterly
total revenues of $652.8 million were also above our projection
of $598.0 million.
Comparing year over year, however, Patterson-UTI's adjusted
earnings per share slumped 34.4% (from 61 cents to 40 cents), and
revenue fell 10.0%. The profit decline from the prior-year
quarter results reflects difficult market conditions.
Rig Count Statistics
The number of operational rigs during the reported quarter
averaged 205 (198 located in the U.S. and 7 in Canada) compared
with 232 average rigs operational in the fourth quarter of 2011
and 216 rigs in the third quarter of 2012.
Segment revenue totaled $425.2 million (65.1% of the total
revenue), down 9.5% year over year. Average revenue per operating
day was $22,460, up 2.2% year over year, while average direct
costs per operating day increased 6.0% year over year to $13,450.
Segment operating profit decreased to $69.0 million from $95.0
million in the year-ago quarter.
Revenue of $212.0 million was down 12.0% year over year. Segment
operating profit decreased to $34.0 million from $51.3 million in
the prior-year quarter due to challenging market conditions.
Despite unfavorable market situations, this segment delivers much
better results than expected.
Oil & Natural Gas:
Revenue stood at $16.0 million, up 6.7% from the year-ago
quarter. Operating income of $7.0 million was slightly down from
$7.3 million earned in the prior-year quarter.
Capital Expenditure & Balance Sheet
During the quarter, Patterson-UTI spent approximately $229.6
million on capital programs (against $300.1 million in the fourth
quarter of 2011). As of Dec 31, 2012, the company had $111.0
million in cash and $699.0 million in long-term debt.
The company repurchased approximately 3.4 million shares for
about $60 million during the quarter.
The company currently carries a Zacks Rank #3 (Hold), implying
that it is expected to perform in line with the broader U.S.
equity market over the next one to three months.
Patterson-UTI is the second-largest North American land drilling
contractor, having a large, high-quality fleet of drilling rigs.
The company's technologically-advanced 'Apex' rigs are the key to
Patterson-UTI's proprietary design makes the rigs move faster
than conventional rigs, drill quicker and more efficiently than
conventional rigs, and allows a safer operating environment. As
such, these rigs are better suited for the new demands of the
exploration business and, therefore, command higher dayrates and
utilization than rigs from other land drillers.
HERCULES OFFSHR (HERO): Free Stock Analysis
HELMERICH&PAYNE (HP): Free Stock Analysis
PATTERSON-UTI (PTEN): Free Stock Analysis
VANTAGE DRILLNG (VTG): Free Stock Analysis
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Whereas recent and substantial volatility in oil and natural gas
prices, may affect the company's results of operations. Some of
the company's customers might curtail their drilling programs,
which, in most of the cases, result in a decrease in demand for
drilling rigs and a reduction in dayrates and utilization.
Meanwhile, three contract drillers that are expected to
outperform the equity markets in the next one to three months are
Helmerich & Payne Inc.
Hercules Offshore Inc.
Vantage Drilling Company
). All the three stocks carry a Zacks Rank #2 (Buy).