It has been about a month since the last earnings report for Patterson-UTI (PTEN). Shares have lost about 14.7% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Patterson-UTI due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important drivers.

Patterson-UTI Q4 Loss Wider Than Expected

Patterson-UTI Energy reported a fourth-quarter 2024 adjusted net loss of 12 cents per share, which was wider than the Zacks Consensus Estimate of a 10-cent loss. The bottom line declined from the year-ago quarter's profit of 19 cents. This year-over-year deterioration was mainly due to poor contribution from the Drilling Services and Completion Services segments.

Total revenues of $1.2 billion missed the Zacks Consensus Estimate by 4.2%. Additionally, the top line decreased 26.6% year over year. This underperformance can be attributed to the decrease in year-over-year revenue contribution from its segments.

In the quarter, the company recorded adjusted EBITDA of $225 million, excluding goodwill impairment, asset retirement charges and merger and integration expenses.

PTEN’s board of directors declared a quarterly dividend of 8 cents per share to its common shareholders of record as of March 3. The payout, which is unchanged from the previous quarter, will be made on March 20.

PTEN returned $52 million to its shareholders in the fourth quarter and $417 million in 2024. It used $20 million to repurchase 2.6 million shares in the fourth quarter and for the full year, $290 million was allocated. As of Dec. 31, 2024, there was $759 million remaining in the share repurchase authorization.

Segmental Performances

Drilling Services: Revenues in this segment totaled $408 million, down 12% from the prior-year quarter’s figure of $463.6 million. However, the top line beat our estimation of $364.4 million.

Operating income amounted to $73 million compared with $92.7 million in the fourth quarter of 2023. The figure also missed our operating income estimate of $39.7 million. The company secured approximately $426 million in term contracts for the U.S. drilling rigs as of Dec. 31, 2024.

Completion Services: This segment’s revenues of $651 million drops about 35.8% from the year-ago quarter’s figure of $1,014.4 million. Moreover, the metric missed our estimation of $736.5 million.

Operating loss totaled $50.2 million against operating profit of $70.3 million in the fourth quarter of 2023. Additionally, the figure was lower than our operating profit estimate of $43.3 million.

Drilling Products:  This segment’s revenues of $86.5 million declined about 1.8% from the year-ago quarter’s figure of $88.1 million. Additionally, the amount missed our estimation of $89.4 million.

Operating profit reached $0.3 million, indicating a 23% decrease compared with the fourth quarter of 2023. However, the number beat our operating loss estimate of $2.6 million.

Other Services: Revenues amounted to $16.4 million, 10.4% lower than the year-ago quarter’s figure of $18.3 million.  However, the figure beat our estimation of $15.1 million.

Operating income amounted to $2.1 million compared with $1 million in the fourth- quarter of 2023. The figure beat our estimation of an operating loss of $1.2 million.

Capital Expenditure & Financial Position

In the reported quarter, PTEN spent $140.4 million on capital programs compared with $205.3 million in the prior year period.

As of Dec. 31, 2024, the company had cash and cash equivalents worth $241 million and long-term debt of $1219 million. The company’s debt-to-capitalization was 26%.

The company generated $1.2 billion in cash from operations and $525 million in free cash flow.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed an upward trend in estimates revision.

The consensus estimate has shifted 34.54% due to these changes.

VGM Scores

Currently, Patterson-UTI has a great Growth Score of A, a grade with the same score on the momentum front. Following the exact same course, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Patterson-UTI has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.

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Patterson-UTI Energy, Inc. (PTEN) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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