PTEN Q3 Earnings Loss Narrower Than Expected, Sales Beat

Core Insights - Patterson-UTI Energy, Inc. (PTEN) reported a third-quarter 2025 adjusted net loss of 6 cents per share, which was better than the Zacks Consensus Estimate of a 10-cent loss, attributed to a 48.7% year-over-year reduction in costs and expenses, although the bottom line declined from the previous year's breakeven level due to poor contributions from the Drilling Products segments [1][11] Financial Performance - Total revenues for the quarter were $1.2 billion, exceeding the Zacks Consensus Estimate by 1%, driven by higher-than-expected revenues from Completion Services, although this represented a 14% year-over-year decline [2][11] - Operating income was reported at $37.1 million, a significant improvement from a loss of $34.4 million in the third quarter of 2024, and surpassed the operating income estimate of $23.9 million [5] - The company declared a quarterly dividend of 8 cents per share, unchanged from the previous quarter, payable on December 15, 2025 [3][11] Segment Performance - Drilling Services revenues totaled $380.2 million, down 10% from $421.6 million in the prior-year quarter, but slightly beat the estimate of $380.1 million [4] - Completion Services revenues were $705.3 million, a 15% decrease from $831.6 million year-over-year, yet exceeded the estimate of $677 million [5] - Drilling Products revenues decreased by 4% to $85.9 million from $89.1 million year-over-year, missing the estimate of $88.8 million [6] - Other Services revenues plummeted 69% to $4.6 million from $15 million year-over-year, also missing the estimate of $10.6 million [7] Capital Expenditure & Financial Position - Capital expenditures for the quarter were $144.5 million, down from $180.6 million in the prior-year period [9] - As of September 30, 2025, the company had cash and cash equivalents of $186.9 million and long-term debt of $1.2 billion, with a debt-to-capitalization ratio of 27.3% [9] Future Outlook - For the fourth quarter, the company expects average rig count in the Drilling Services segment to remain stable, with a projected 5% decrease in adjusted gross profit compared to the third quarter [13] - In Completion Services, adjusted gross profit is anticipated to be around $85 million, with stable activity levels expected [14] - The company projects a slight improvement in adjusted gross profit for the Drilling Products segment compared to the third quarter, with steady performance expected in both the U.S. and Canada [15] - Capital expenditures for the fourth quarter are estimated to be around $140 million, with total capital expenditures for the full year expected to be under $600 million [17]