Yahoo Finance Why Did Patterson-UTI Energy’s 1Q16 Earnings Beat Estimates?
Patterson-UTI Energy's Q1 Earnings: Why the Confidence?
Patterson-UTI Energy’s fiscal 1Q16 revenues
Patterson-UTI Energy (PTEN) released its fiscal 1Q16 financial results on April 28. The company recorded ~$269 million in total revenues in fiscal 1Q16, down 59% from ~$657.7 million recorded in fiscal 1Q15. Patterson-UTI Energy’s revenues for the latest quarter fell mostly due to a slowdown in North American drilling operations, which led to a lower average rig count.
Compared to 4Q15, Patterson-UTI Energy’s revenues fell 20.5%. Fiscal 1Q16 revenue for RPC (RES), PTEN’s larger-market-cap peer, fell 54% year-over-year.
Patterson-UTI Energy’s 1Q16 earnings
The fiscal 1Q16 adjusted net earnings per share (or EPS) for Patterson-UTI Energy is -$0.46. This beat consensus sell-side analysts’ EPS estimate. Despite lower earnings in PTEN’s operating segments, a steady margin per operating day in contract drilling services, and a higher margin in fracturing jobs helped PTEN’s earnings beat analysts’ estimates.
Compared to fiscal 1Q15, PTEN’s adjusted earnings turned to an adjusted loss per share in fiscal 1Q16. On average, adjusted EPS have exceeded consensus EPS in the past 13 quarters. Patterson-UTI Energy is 2.6% of the Market Vectors Oil Services ETF (OIH), an ETF tracking an index of 25 oilfield service companies.
What affected Patterson-UTI Energy’s reported earnings in F1Q16?
In fiscal 1Q16, PTEN’s reported net loss was ~$70.5 million. This was a switch from fiscal 1Q15, when PTEN reported $9.1 million in net income. Year-over-year, PTEN’s income fell mostly due to a lower rig count and a drastic drop in PTEN’s contract drilling and pressure pumping margin. Compared to 4Q15, when Patterson-UTI Energy recorded a $58.5 million net loss, the fiscal 1Q16 reported earnings fell.
Next, we’ll discuss PTEN’s growth drivers.
Browse this series on Market Realist:
