(Reuters) - Oilfield services provider Patterson-UTI Energy Inc (PTEN.O) reported a bigger-than-expected quarterly loss on Thursday, but forecast a modest increase in rig count in early 2020.
Lower crude prices and investor demand for higher returns have forced U.S. oil and gas companies to hold off on drilling, hurting earnings of companies that provide drilling and fracking services.
However, Patterson-UTI’s rig count rose for the first time in a year in December and is expected to pick up in the current quarter.
The company said activity in the prolific shale oil producing Permian Basin should more than offset lower drilling in other regions in the first quarter.
Rival Helmerich & Payne (HP.N) earlier this week also said it expects a modest increase in active drilling rigs in the current-quarter.
Patterson-UTI, however, warned that its pressure pumping business would be hit in the first quarter due to a sudden operational stoppage of an unnamed major oil company customer, but said results from the business will improve later in the year.
Huge cost-cutting efforts in the quarter helped the company post a much smaller loss, but it still fell short of analysts’ estimates as repairs and maintenance of some equipment piled on more costs than the company had anticipated.
Larger rivals Schlumberger and Halliburton have also undertaken cost-cutting efforts by laying off workforce and putting up assets for sale to boost earnings in a tough market.
Patterson-UTI’s net loss narrowed to $85.9 million, or 44 cents per share, in the fourth quarter ended Dec. 31, from a loss of $201.2 million, or 93 cents per share, a year earlier.
On a per share basis, the company incurred a loss of 43 cents, bigger than analysts’ estimates of 42 cents, according to IBES data from Refinitiv.
Patterson-UTI’s revenue fell 38.1% to $492.3 million, but came in above analysts’ average estimates of $486.3 million.
Shares of the Houston-based company fell 3.4% to $8.16 in morning trade amid broader weakness in energy companies due to weak oil prices.
Reporting by Taru Jain; Editing by Amy Caren Daniel