Patterson-UTI Energy, Inc. (NASDAQ: PTEN) has announced its financial results for the second quarter ended June 30, 2024. The company reported a total revenue of $1.3 billion and a net income of $11 million, or $0.03 per share. Despite incurring $11 million in merger and integration expenses, the company achieved an adjusted EBITDA of $324 million.
Second Quarter 2024 Financial Results:
- Total Revenue: $1.3 billion
- Net Income: $11 million, or $0.03 per share (includes $11 million in merger and integration expenses)
- Adjusted EBITDA: $324 million (excludes merger and integration expenses)
- Cash from Operations (YTD): $563 million
- Free Cash Flow (YTD): $206 million
- Shareholder Returns: $164 million returned to shareholders in the second quarter, $295 million in the first half of the year; expected to return at least $400 million in 2024.
- Share Repurchase: $132 million used to repurchase 12 million shares in the second quarter; $407 million returned to shareholders including $309 million to repurchase 28 million shares since NexTier merger and Ulterra acquisition.
- Dividend: Quarterly dividend of $0.08 per share, payable on September 16, 2024.
Management Commentary:
- Focus on maximizing returns through the cycle.
- Strong performance in U.S. Contract Drilling with steady revenue per day for high-quality rigs.
- Completion Services saw strong results with electric frac technology despite some short-term declines in natural gas basins.
- Drilling Products experienced margin growth and market share gains despite seasonal impacts.
- Outlook for U.S. shale drilling activity remains steady with growth expected in 2025, particularly in natural gas basins.
- Integrated drilling and completions offering showing promising early results.
- Expanding natural gas fueling business and deploying new CNG and field gas blending technology in West Texas in Q3 2024.
Segment Performance:
- Drilling Services: $440 million in revenue, with $178 million adjusted gross profit.
- Completion Services: $805 million in revenue, with $152 million adjusted gross profit.
- Drilling Products: $86 million in revenue, with $40 million adjusted gross profit.
- Other Revenue: $16 million, with $6 million adjusted gross profit.
Financial Outlook:
- Steady industry drilling activity expected for the rest of the year.
- Customers using completion activity to manage budgets, impacting frac activity.
- U.S. Contract Drilling expected to operate an average of 108 rigs in Q3 2024.
- Completion Services expected to see less white space and increased adjusted gross profit in Q3 2024.
- Drilling Products segment expected to grow internationally and recover seasonally in Canada.
Non-GAAP Measures:
- Adjusted EBITDA: $324 million for Q2 2024.
- Free Cash Flow: $206 million for the first half of 2024.
Conclusion
Patterson-UTI Energy has demonstrated robust financial and operational performance in the second quarter of 2024. With significant revenue generation, solid net income, and substantial free cash flow, the company continues to show resilience and strategic growth. The successful integration of NexTier and Ulterra, combined with advancements in electric frac technology and natural gas fueling, positions Patterson-UTI for continued success. The company’s commitment to returning capital to shareholders and its focus on maximizing returns through an integrated business model underscore a promising outlook for the remainder of 2024 and beyond. As the industry stabilizes, Patterson-UTI is well-prepared to capitalize on emerging opportunities and drive value for its stakeholders.
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