Back to top

Image: Bigstock

Patterson-UTI Energy to Report Q3 Earnings: What's in Store for the Stock?

Read MoreHide Full Article

Patterson-UTI Energy, Inc. (PTEN - Free Report) is set to report third-quarter earnings on Oct. 23. The Zacks Consensus Estimate for earnings is pegged at 1 cent per share and that for revenues is pinned at $1.29 billion.

Let us delve into the factors that are likely to have influenced PTEN’s performance in the to-be-reported quarter. Before that, it is worth taking a look at the company’s performance in the last reported quarter.
 

Stay up-to-date with all quarterly releases: See Zacks Earnings Calendar.
 

Highlights of Q2 Earnings

In the last reported quarter, the Houston, TX-based oilfield services company’s earnings missed the consensus mark. PTEN reported an adjusted net profit of 5 cents per share, which was 4 cents lower than the Zacks Consensus Estimate. This was attributed to the poor performance of the Drilling Services segment in the quarter. Revenues of $1.3 billion also missed the Zacks Consensus Estimate by 4.8%.

PTEN’s earnings beat the Zacks Consensus Estimate in two of the trailing four quarters and missed the mark in the remaining two, delivering an average negative surprise of 11.65%.

This is depicted in the graph below:

Patterson-UTI Energy, Inc. Price and EPS Surprise

Patterson-UTI Energy, Inc. Price and EPS Surprise

Patterson-UTI Energy, Inc. price-eps-surprise | Patterson-UTI Energy, Inc. Quote

Trend in Estimate Revision

The Zacks Consensus Estimate for third-quarter 2024 earnings has not witnessed any movement in the past seven days. The estimated figure indicates a 95% year-over-year decline. The Zacks Consensus Estimate for revenues indicates an increase of 27.41% from the year-ago period.

Factors to Consider

The appreciation in PTEN's costs is likely to have hurt its bottom line. The company’s operating costs and expenses are projected to have reached $1271.7 million in the third quarter, which is 27% up from the year-ago period’s level. Its direct operating costs are expected to have increased from $691.5 million to $932.9 million in the same time frame.  Furthermore, the company’s selling, general and administrative expenses are anticipated to have increased from $45.1 million to $62.8 million. Additionally, depreciation, depletion, amortization and impairment costs are projected to have climbed to $256.3 million, representing a 29.7% increase from the year-ago period’s level.

PTEN's revenues are likely to have improved in the quarter to be reported. It makes money by helping oil and gas companies find and extract oil and natural gas. The company does this by drilling wells, completing those and providing the tools needed for these processes.

Our model predicts third-quarter revenues to have increased to $1288.6 million from the year-ago quarter’s $1011.5 million. This can be attributed to the strong performance of the Completion Services and Drilling Products segment. Its revenues from the Completion Services segment are expected to have increased from $459.6 million to $814.0 million in the same time frame.  The Drilling Products segment is also projected to have seen revenue growth, increasing from $46.57 million to $88 million.
 

What Does Our Model Predict?

The proven Zacks model does not conclusively predict an earnings beat for Patterson-UTI Energy this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. However, that’s not the case here.

Earnings ESP: Earnings ESP, which represents the difference between the Most Accurate Estimate and the Zacks Consensus Estimate, for this company is -6.67%.

You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank:  PTEN currently carries a Zacks Rank #4 (Sell).
 

Stocks to Consider

Here are some firms from the energy space that you may want to consider, as these have the right combination of elements to post an earnings beat in this season.

Cheniere Energy, Inc. (LNG - Free Report) has an Earnings ESP of +5.35% and a Zacks Rank #2 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The firm is scheduled to release earnings on Oct. 31. LNG’s earnings beat the Zacks Consensus Estimate in two of the last four quarters and missed the other two, delivering an average surprise of 55.86%. Valued at around $41.22 billion, LNG has gained 6.1% in a year.

Canadian Natural Resources Limited (CNQ - Free Report) has an Earnings ESP of +2.51% and a Zacks Rank #3 at present. The firm is scheduled to release earnings on Oct. 31.

CNQ’s earnings beat the Zacks Consensus Estimate in three of the last four quarters and missed the remaining one, delivering an average surprise of 7.16%. Calgary-based CNQ is one of the largest independent energy companies in Canada engaged in the exploration, development and production of oil and natural gas.

TC Energy Corporation (TRP - Free Report) has an Earnings ESP of +4.57% and a Zacks Rank #3 at present. The firm is scheduled to release earnings on Nov. 7. Valued at around $49.92 billion, TRP has gained 41.8% in a year.

The company is primarily focused on natural gas transmission through its 57,500-mile network of pipelines located in Canada, the United States and Mexico. TC Energy is also involved in other businesses, including power generation, natural gas storage and crude oil pipelines.

Published in