Shares of Patterson-UTI Energy (PTEN 2.84%) fell as much as 11.4% in trading Thursday after the company reported fourth-quarter 2020 financial results. Shares of the energy stock bounced near their low of the day early in the afternoon and were down 10.2% at 1:55 p.m. EST.
Quarterly revenue plunged a whopping 55.1% to $220.8 million in the fourth quarter, and net loss was $106.5 million, or $0.57 per share. Analysts were expecting a $0.62 loss per share on $218.1 million in revenue.
It's no surprise that oil and gas drilling fell dramatically in 2020 as energy consumption declined because of the pandemic. But management indicated that the recovery in energy markets will be somewhat slow, with five of 69 rigs expected to be contracted but idle in the first quarter.
Oil prices have recovered from their lows in spring of 2020, but there's still a lot of uncertainty ahead. Oil demand in the U.S. is still weak because fewer people are commuting and economic activity has slowed. What I worry about is the emergence of electric vehicles as a long-term threat to energy markets, which could decrease the need for more oil wells and continue to hurt companies like Patterson-UTI long term.