Cost surge pressures margins
Precision Drilling Corp. reported first-quarter revenue of $526 million, yet earnings fell to $17.4 million after higher compensation costs and increased depreciation, missing analyst expectations and sending shares down 7.5%.
The Calgary-based oilfield services company said net earnings attributable to shareholders totaled $17.4 million for the three months ended March 31, down from $34.5 million a year earlier. Earnings were $1.34 per share, below the $2.71 per share expected by analysts, according to LSEG Data & Analytics, and lower than the $2.20 per share recorded in the first quarter of 2025.
Expense growth reverses prior-year earnings stability
The decline in earnings follows a prior-year quarter in which the company reported $35 million in net earnings attributable to shareholders, or $2.52 per share, with share-based compensation totaling $2.8 million.
In the latest quarter, share-based compensation increased to $18.9 million, while depreciation included an additional $11 million tied to drill pipe life revisions.
Adjusted EBITDA decreased 10% to $124 million from $137 million a year earlier. In the first quarter of 2025, Adjusted EBITDA included $3 million in restructuring costs and $3 million in share-based compensation.
Revenue growth supported by drilling activity gains
Revenue rose to $526 million from $496 million in the prior-year quarter, when results were affected by lower U.S. drilling activity offsetting Canadian strength.
The latest increase was driven by higher activity in Canada and the United States, with revenue in those markets rising by $24 million and $13 million, respectively.
Operational data showed higher utilization levels. Canada averaged 79 active rigs compared with 74 in the same period of 2025, while U.S. activity increased to 37 rigs from 30.
In the prior-year quarter, U.S. activity averaged 30 rigs, down from 38 in 2024, while Canadian activity averaged 74 rigs.
Revenue per utilization day in Canada declined to $35,021 from $35,601, while U.S. rates increased to US$33,715 from US$33,157. Internationally, the company operated seven rigs compared with eight a year earlier, with revenue per utilization day rising to US$51,596 from US$49,419.
Cash generation consistent while capital deployment shifts
Cash provided by operations totaled $63 million, consistent with the first quarter of 2025, when the company also generated $63 million in operating cash flow.
In 2026, the company repurchased $4 million in shares and reduced debt by $25 million. A year earlier, Precision repurchased $31 million in shares and reduced debt by $17 million.
Precision ended the latest quarter with $41 million in cash and more than $430 million in available liquidity, compared with $28 million in cash and nearly $550 million in available liquidity at the end of the first quarter of 2025.
Capital expenditures rose to $65 million from $60 million a year earlier. The 2025 quarter included $40 million in maintenance and $20 million in upgrades, while the 2026 period included $35 million in maintenance and $30 million in upgrades.
The company revised its 2026 capital budget to $265 million from $245 million, following a reduction of its 2025 capital budget to $200 million from $225 million in the prior year.
Recent quarterly and annual results frame performance trend
The first-quarter results follow a fourth-quarter 2025 period in which Precision reported revenue of $479 million and a net loss attributable to shareholders of $42 million, including non-cash charges tied to asset decommissioning and drill pipe.
Cash provided by operations in that quarter totaled $126 million, funding $81 million in capital expenditures and $22 million in share repurchases.
For the full year 2025, the company reduced debt by $101 million and repurchased $76 million in shares, ending with a net debt-to-adjusted EBITDA ratio of about 1.2 times and more than $445 million in available liquidity.
Precision’s 2026 capital allocation plan includes $245 million in investment, $100 million in debt reduction, and allocating up to 50% of free cash flow toward share repurchases.
