Patterson-UTI Energy Inc. (NASDAQ:PTEN) Gets Downgraded In spite of Solid 3Q


Dallas, Texas 10/28/2013 (Financialstrend) – Patterson-UTI Energy Inc. (NASDAQ:PTEN) is a $3.24 billion market capitalized oil drilling and exploration company. In the past 20 days, the company has been at the receiving end of downgrades from two analyst firms, which is indicative of the weakness the company financials are exhibiting over the past few weeks.

The first rating downgrade came in October 9, in the run up to the 3 quarter earnings call which happened on October 24. The rating agency Cowen had then pegged back the oil drilling company’s rating from outperform to market perform. After the 3Q results announcement, on October 25, rating agency Wunderlich has pushed marked the company has a hold as against its buy rating previously.

The successive downgrades are an indication of weak prospects for the oil manufacturer in fourth quarter and beyond rather than a below performance in the third quarter. Analyst consensus has termed its 3Q results as “decent”. It has managed to bring earnings which were in line with its own forecast and meet up with expectations of the street. But the concern for investors of the stock is the 4Q revenue and production guidance which the company lowered during its 3Q update. This guidance of soft quarter performance in the ensuing three months of the last quarter of the fiscal year has caused the rating agencies to downgrade the stock.

In the third quarter Patterson-UTI Energy Inc. (NASDAQ:PTEN) reported earnings per share of $0.51 per share revenue of $731 million were indicators of strong performance both in terms of operations and increasing operational efficiency. The revenue reported was $50 million more than the pre-call consensus expectation from analysts. The earnings per share was in line with the expectations that analyst had set before the call.

In spite of solid 3Q results the stock shed close to 7.2% of its market value during trading last week to settle at $22.28 per share as of October 25.