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A Look at Patterson-UTI Energy’s Segment Drivers


Nov. 20 2020, Updated 11:39 a.m. ET

Patterson-UTI Energy’s segments 

From 4Q15 to 4Q16, Patterson-UTI Energy’s (PTEN) Contract Drilling segment’s revenue fell ~33.0%. Its Pressure Pumping segment fell 20.0% in revenues for the same period. These two segments accounted for 98.0% of PTEN’s total revenues in 4Q16.

The Contract Drilling segment saw a further operating loss, falling 144.0% in 4Q16 over 4Q15. The Pressure Pumping Solutions segment’s adjusted loss was relatively resilient, falling 6.0% in 4Q16 over a year ago.

Patterson-UTI Energy makes up 0.04% of the Vanguard High Dividend Yield ETF (VYM). The oil and gas industry makes up 9.5% of VYM.

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Major negative factors

Below are some major negative factors that drove PTEN’s performance:

  • 44.0% lower operating rigs in Contract Drilling in 4Q16 over 4Q15
  • 10.0% lower average revenue per operating day in its Contract Drilling segment
  • 40.0% lower average margin per total job in its Pressure Pumping segment

Positive factors

Below are some positive factors that drove PTEN’s performance:

  • 24.0% higher average revenue per total job in Contract Drilling
  • increase of 6.0% to 66 for its average US rig count in 4Q16 compared to 3Q16
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Patterson-UTI Energy’s fiscal 2016 performance

In 2016, PTEN reported $915.8 million in revenues. That was 52.0% lower than 2015. In 2016, the company’s net loss was $318.6 million compared to a $294.5 million net loss in 2015. In 2016, its earnings were affected by $288.0 million in goodwill impairment charges associated with PTEN’s Pressure Pumping business, the write-down of equipment, and the impairment of certain oil and natural gas properties.

Net income for PTEN versus peers

Patterson-UTI Energy’s larger market cap peer Helmerich & Payne (HP) recorded $103.0 million in net loss for 2016. Weatherford International (WFT) recorded a ~$3.4 billion net loss in 2016. You can read about Weatherford’s 4Q16 earnings in Market Realist’s Did Weatherford International Meet 4Q16 Estimates? 

On February 1, 2017, WFT signed an alliance with Nabors Industries (NBR). You can read more about it in Market Realist’s Nabors’ Alliance with Weatherford: How Did the Market Respond?

Next, we’ll see how Patterson-UTI Energy’s EBITDA (earnings before interest, tax, depreciation, and amortization) margin is affected by upstream companies’ capital expenditures.


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