Patterson-UTI Energy's Q4 Earnings Fall Y/Y, Sales Lag Estimates

Core Insights - Patterson-UTI Energy, Inc. (PTEN) reported a fourth-quarter 2024 adjusted net loss of 12 cents per share, wider than the Zacks Consensus Estimate of a 10-cent loss, and a decline from the previous year's profit of 19 cents per share [1] - Total revenues for the quarter were $1.2 billion, missing the Zacks Consensus Estimate by 4.2% and decreasing 26.6% year over year, attributed to lower revenue contributions from its segments [2] Financial Performance - Adjusted EBITDA for the quarter was $225 million, excluding certain charges [3] - The company declared a quarterly dividend of 8 cents per share, unchanged from the previous quarter, to be paid on March 20 [3] - PTEN returned $52 million to shareholders in the fourth quarter and $417 million for the full year, with $20 million used for share repurchases in the fourth quarter [4] Segment Performance - Drilling Services: Revenues totaled $408 million, down 12% from $463.6 million in the prior year, but exceeded estimates of $364.4 million. Operating income was $73 million, down from $92.7 million [5] - Completion Services: Revenues dropped 35.8% to $651 million from $1,014.4 million year over year, missing estimates of $736.5 million. The segment reported an operating loss of $50.2 million compared to a profit of $70.3 million in the previous year [6] - Drilling Products: Revenues were $86.5 million, a decline of 1.8% from $88.1 million year over year, missing estimates of $89.4 million. Operating profit was $0.3 million, down 23% from the previous year [7] - Other Services: Revenues were $16.4 million, down 10.4% from $18.3 million year over year, but exceeded estimates of $15.1 million. Operating income was $2.1 million, up from $1 million in the previous year [8] Capital Expenditure & Financial Position - PTEN spent $140.4 million on capital programs in the reported quarter, down from $205.3 million in the prior year [9] - As of December 31, 2024, the company had cash and cash equivalents of $241 million and long-term debt of $1,219 million, with a debt-to-capitalization ratio of 26% [9] - The company generated $1.2 billion in cash from operations and $525 million in free cash flow [10] Outlook - The company anticipates a strong start in its Drilling Services segment, with an average of 106 rigs operating in the first quarter and an expected adjusted gross profit per operating day of approximately $15,250 [11] - In the Completion Services segment, a seasonal boost in activity is expected, with adjusted gross profit anticipated to reach about $100 million in the first quarter [12] - For the Drilling Products segment, flat adjusted gross profit is forecasted for the first quarter, with optimism for increased international revenues in 2025 [13] - Selling, general and administrative costs are expected to be around $67 million for the first quarter, with depreciation and amortization expenses estimated at $235 million [14] - For 2025, capital expenditures are anticipated to total roughly $600 million, with lower expenditures planned across each segment compared to 2024 [14]