Onshore contract driller,
Patterson-UTI Energy Inc.
) reported better-than-expected first-quarter 2013 results. The
outperformance was primarily driven by the increased use of high
specification APEX rig fleet in contract drilling operations.
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Patterson-UTI's earnings per share (EPS) came in at 38 cents,
beating the Zacks Consensus Estimate of 36 cents. Quarterly total
revenue of $667.0 million was also above our projection of $641.0
Comparing year over year, however, Patterson-UTI's earnings per
share fell 38.7% (from 62 cents to 38 cents), and revenues
dropped 10.6%. The profit decline reflects difficult market
Rig Count Statistics
The number of operational rigs during the reported quarter
averaged 199 (188 located in the U.S. and 11 in Canada) compared
with 237 in the first quarter of 2012.
Segment revenues totaled $419.1 million (62.8% of the total
revenue), down 14.4% year over year. Average revenues per
operating day was $23,410, up 3.4% year over year, while average
direct costs per operating day increased 5.5% year over year to
$13,800. Segment operating profit decreased to $72.5 million from
$111.8 million in the year-ago quarter.
Revenues of $231.2 million were down 4.4% year over year. Segment
operating profit decreased to $28.5 million from $46.8 million in
the prior-year quarter due to challenging market conditions.
Despite unfavorable market situations, this segment delivered
much better results than expected.
Oil & Natural Gas:
Revenues were $16.8 million, up 14.0% from the year-ago quarter.
Operating income of $6.2 million was down from $7.5 million
earned in the prior-year quarter.
Capital Expenditure & Balance Sheet
During the quarter, Patterson-UTI spent approximately $174.2
million on capital programs (against $263.4 million in the first
quarter of 2012). As of Mar 31, 2013, the company had $144.0
million in cash and $697.5 million in long-term debt (including
Patterson-UTI currently retains a Zacks Rank #3 (Hold).
However, there are certain other companies in the contract
drilling service industry that are expected to outperform over
the short term. These include
) with a Zacks Rank #1 (Strong Buy), and
Hercules Offshore Inc.
Vantage Drilling Company
) with a Zacks Rank #2 (Buy).