Onshore contract driller
Patterson-UTI Energy Inc.
) reported disappointing third-quarter 2013 earnings owing to
significant hike in direct operating expenses and unsatisfactory
operating performance from the Oil & Natural Gas unit.
Patterson-UTI's earnings per share (EPS) (excluding special
items) came in at 25 cents, lagging the Zacks Consensus Estimate
of 31 cents. The figure also decreased 35.9% from the year-ago
adjusted profit of 39 cents.
Revenues of $730.9 million surpassed the Zacks Consensus Estimate
of $673.0 million, and were 13.6% higher than $643.6 million
generated in the year-ago quarter, primarily due to greater
contribution from the Pressure Pumping and Contract Drilling
Patterson-UTI has inked 27 term agreements during the
third-quarter. The company expects to generate revenue of roughly
$967 million in the future from the term contracts signed till
Rig Count Statistics
The number of operational rigs of Patterson-UTI during the
reported quarter averaged 189 (181 located in the U.S. and 8 in
Canada) compared with 216 in the third quarter of 2012.
This segment's revenues totaled $457.9 million (62.7% of the
total revenue), up 2.5% year over year. Adjusted average revenues
per operating day was $22,650, marginally up 0.9% year over year,
while average direct costs per operating day increased 3.1% year
over year to $13,750. The segment's operating profit increased to
$116.3 million from $78.0 million in the year-ago quarter, owing
to significant decrease in selling, general and administrative
Revenues of $259.2 million were up 42.5% year over year.
Moreover, the segment's operating profit increased to $16.9
million from $15.0 million in the prior-year quarter on increased
level of activity.
Oil & Natural Gas:
Revenues were $13.8 million, down 7.4% from the year-ago quarter.
Moreover, operating income of $5.4 million decreased marginally
by 0.3% from third-quarter 2012 due to substantial rise in direct
Direct operating costs
The company reported direct operating expenses at $447.4
million, representing a hike of 12.6% from $397.4 million
reported in the year-ago quarter.
Dividend & Share Repurchase
Patterson-UTI has approved 5 cents per share of quarterly cash
dividends, which will be payable on Dec 31, 2013, to shareholders
of record as on Dec 17, 2013.
In the third quarter 2013, Patterson-UTI spent roughly $63.4
million for repurchasing 3.2 million shares.
Capital Expenditure & Balance Sheet
During the quarter, Patterson-UTI spent approximately $150.7
million on capital programs (against $232.3 million in the third
quarter of 2012). As of Sep 30, 2013, the company had $204.6
million in cash and $695.0 million in long-term debt (including
Patterson-UTI is expecting $750 million of capital expenditure
For fourth-quarter, the company anticipates rig operating
expenses per day to be $13,800, in line with the third quarter.
Moreover, Patterson-UTI projects revenues from pressure pumping
unit to decline to $240 million in comparison to the third
NABORS IND (NBR): Free Stock Analysis Report
OCEAN RIG UDW (ORIG): Free Stock Analysis
PIONEER EGY SVC (PES): Free Stock Analysis
PATTERSON-UTI (PTEN): Free Stock Analysis
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Patterson-UTI, the second-largest North American land drilling
Nabors Industries Ltd.
), currently retains 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.
Meanwhile, one can look at oil and gas drilling firms like
Ocean Rig UDW Inc.
Pioneer Energy Services Corp.
) that offer better prospects. Both the stocks sport a Zacks Rank
#1 (Strong Buy).