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The Top 5 Oilfield Services Stocks for 4Q17 by Revenue Growth

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Comparing oilfield services and equipment companies

In this series, we’ll examine and rank the highest- and lowest-growth US oilfield services and equipment (or OFS) companies in 4Q17 versus 3Q17, based on analysts’ expectations. However, we have not included any offshore drillers in our analysis.

We’ll compare these companies by:

  • net income or EPS (earnings per share)
  • operating earnings or EBITDA (earnings before interest, tax, depreciation, and amortization)
  • revenues
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Patterson-UTI Energy’s revenue growth

The sell-side analysts expect Patterson-UTI Energy (PTEN), a leading rig contractor and oilfield services provider, to register an ~12.0% revenue rise in 4Q17 compared to 3Q17. PTEN is expected to benefit from the three APEX-XK rig upgrading and two nonsuper-spec APEX 1500 rigs upgrading.

PTEN’s management expects 4Q17 revenues from its pressure pumping business to increase due to the reactivation of one hydraulic fracturing spread late in 4Q17 as well as higher pricing. Following the acquisition of MS Energy Services on October 11, 2017, its revenues and gross margin are expected to improve in 4Q17.

Expected revenue growth for OIS and BHGE

Wall Street analysts expect Oil States International (OIS) to see ~8.0% revenue growth in 4Q17 over 3Q17. OIS’s management expects continued upstream activity improvement from onshore completions activity in North America. Other factors include higher major project-driven revenues as activity resumes in hurricane-hit Houston and steady demand for US land-centric services and manufactured products.

Wall Street analysts expect Baker Hughes, a GE Company (BHGE) to post 4.6% revenue growth in 4Q17 over 3Q17. BHGE comprises 3.2% of the SPDR S&P Oil & Gas Equipment & Services ETF (XES).

XES decreased 23% in the past year versus a 30.0% fall in BHGE’s stock price during the same period. The Dow Jones Industrial Average (DJIA-INDEX) has increased 25% in the past year.

Expected revenue growth for NBR

Wall Street analysts expect Nabors Industries (NBR) to see 6.7% revenue growth in 4Q17 over 3Q17. NBR’s management expects that in the US onshore sector, NBR could maintain or slightly increase its average rig count in 4Q17. NBR expects to add rigs in the international operations.

NBR’s US onshore margin is expected to increase due to continued dayrate increases and lower daily operating expenses. The company also expects higher contract rates for the rigs that will see contracts expire in 4Q17.

On August 14, 2017, Nabors Industries (NBR) disclosed that it signed an agreement to acquire its oilfield equipment and services (or OFS) industry peer Tesco Corporation (TESO). You can read more about this in Market Realist’s Can Nabors Bank on Synergies from Tesco?

Next, we’ll discuss which OFS companies can see the steepest revenue declines in 4Q17.

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