Market Movers On the rise
Shares of Precision Drilling Corp. jumped on Tuesday after reporting fourth-quarter 2023 financial results before the bell that topped the Street’s expectations.
The Calgary-based company said EBITDA came in at $157.2-million, exceeding the consensus forecast by 4 per cent ($151.8-million) due to stronger-than-expected rig activity on both side of the border and gains in Canadian margins. Adjusted earnings per share of $3.99 blew past the $2.69 expectation.
Precision also said it will continue to focus on deleveraging and share buybacks in 2024, increasing its long-term debt reduction target to $600-million between 2022 and 2026 from its previous goal of $500-million from 2022 to 2025. It will allocate 25-35 per cent of free cash flow before debt repayments to share repurchases.
The company’s drilling rig utilization days in Canada for the quarter were down 2.5 per cent compared with a year ago, while its U.S. operations saw a 24.5 per cent drop. International drilling rig utilization days were up 25.5 per cent compared with last year.
Precision Drilling says its service rig operating hours for the quarter were up 14.8 per cent from a year ago.
In a research note, ATB Capital Markets analyst Waqar Syed said: “We view PD’s results positively. PD is very well positioned for the Canadian secular growth angle and improving its international presence. However, we await guidance on U.S. activity where per its website activity is at 37 rigs, well below expectations and sharply lower quarter-over-quarter.”