Patterson-UTI's Earnings and Revenues Surpass Estimates in Q1

Core Insights - Patterson-UTI Energy, Inc. (PTEN) reported breakeven adjusted earnings per share for Q1 2025, outperforming the Zacks Consensus Estimate of a loss of 4 cents, driven by an 11.2% year-over-year reduction in costs and expenses, although the bottom line declined from 15 cents in the prior year [1] - Total revenues of $1.3 billion exceeded the Zacks Consensus Estimate by 7.7%, attributed to higher-than-expected revenues from Drilling Services and Completion Services, despite a 15.2% year-over-year decline [1] Segmental Performances - Drilling Services: Revenues totaled $412.9 million, down 9.8% from $457.6 million in the prior year, but beat the estimate of $405.7 million. Operating income was $76.3 million compared to $89.6 million in Q1 2024, exceeding the estimate of $63.2 million [3] - Completion Services: Revenues were $766.1 million, a decrease of 18.9% from $945 million in the previous year, yet surpassed the estimate of $690.7 million. Operating loss was $18.8 million compared to a profit of $49.6 million in Q1 2024, but was narrower than the estimated loss of $31.4 million [4] - Drilling Products: Revenues declined 4.8% to $85.7 million from $90 million in the prior year, missing the estimate of $86 million. Operating profit increased 3.5% to $6.7 million, beating the estimate of $4.3 million [5] - Other Services: Revenues were $15.9 million, down 10.6% from $17.8 million in the previous year, missing the estimate of $16.5 million. Operating income was $0.2 million compared to $1 million in Q1 2024, also missing the estimate of $0.5 million [6] Financial Position - PTEN spent $161.8 million on capital programs in the reported quarter, down from $226.9 million in the prior year. As of March 31, 2025, the company had cash and cash equivalents of $225.2 million and long-term debt of $1.2 billion, with a debt-to-capitalization ratio of 26% [7] - The company returned $51 million to shareholders in Q1 2025, including $20 million in share repurchases, with $741 million remaining under its share repurchase authorization [8] Q2 Outlook - Drilling Services: Rig activity is expected to remain steady, with a slight decline in adjusted gross profit anticipated due to lower average contracted revenues from older contracts and seasonal cost increases [10] - Completion Services: Activity is expected to stay stable, with a potential decline in adjusted gross profit depending on oil prices later in the quarter [11] - Drilling Products: Adjusted gross profit is expected to remain flat, with steady activity in the U.S. and a seasonal slowdown in Canada balanced by higher international revenues [11] - Other Services: A proportional decline in adjusted gross profit is expected due to the absorption and sale of parts of the Great Plains Oilfield Rental business [12]