Lowest Revenue Growth for Oilfield Services Stocks in 1Q16
The Top Growth Oilfield Services Stocks for 1Q16
Will Patterson-UTI Energy be the laggard by revenue growth?
Wall Street analysts expect Patterson-UTI Energy (PTEN) to register the steepest revenue decline in our oilfield services and equipment (or OFS) set. PTEN can see a 23% revenue fall in 1Q16 compared to 4Q15. A significant decrease in PTEN’s rigs under contract in 1Q16 over the previous quarter can result in the revenue decrease.
PTEN comprises 0.17% of the SPDR S&P MidCap 400 ETF (MDY). It also comprises 0.47% of the WisdomTree SmallCap Dividend ETF (DES). The other factors that can reduce PTEN’s revenues in 1Q16 include a decrease in the average rig revenue per day, as well as lower pressure pumping revenues due to the stacking of horsepower.
RPC Inc.’s expected revenue fall
RPC, Inc. (RES) is expected to witness a 19.5% revenue decline in 1Q16 over 4Q15. RPC Inc.’s revenues are closely linked to directional and horizontal wells. In 2016, the US rig count is expected to keep declining, which can cause a significant revenue decline for RPC.
RPC’s management is worried about further energy price falls in North America and the difficulty in raising capital for upstream producers. These factors can drive RPC’s revenues lower.
Oil States International’s revenue fall
Oil States International (OIS) is expected to witness an ~18% revenue decline in 1Q16 over 4Q15. OIS’s 1Q16 revenue can decline due to a lower offshore products backlog and shorter offshore project cycles. OIS’s management believes that North American drilling and completion activity should remain depressed, negatively affecting OIS’s revenues.
Halliburton (HAL), the second-largest OFS company by market capitalization, is expected to see 15% lower revenues in 1Q16 over a quarter ago. To learn more about HAL, please read Halliburton’s Challenges before the Oil Recovery Begins.
Next, we will discuss the top five OFS companies by expected EBITDA growth in 1Q16.
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