Precision Drilling Q3 Revenue Up 15% to C$532M; Flags C$155M Max CRA Tax Exposure
PDS sits 76% above its 52-week low of $56.1.
Summary
Precision Drilling posted 15% Q3 revenue growth to C$532 million and C$21 million of net earnings, raised its 2026 capital budget, and disclosed a CRA reassessment with a maximum estimated tax exposure of about C$155 million that it has not provided for.
Key Events · Earnings and Guidance · PDS
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Q3 Revenue Grows 15% to C$532M
Revenue rose to C$531.652 million from C$462.250 million, with Canada averaging 73 active rigs (up 16%) and the U.S. 43 rigs (up 19%).
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Net Earnings Swing to C$21M
Net earnings attributable to shareholders were C$20.917 million ($1.65 per share) versus a C$6.761 million loss in Q3 2025; Adjusted EBITDA rose 6.4% to C$125.116 million.
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CRA Reassessment Flags C$155M Exposure
The CRA reassessed 2018 intercompany dividend deductions and proposed the same for 2019-2022; Precision estimates a maximum tax liability of about C$155 million excluding interest, has recognized no liability, and will object.
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Capital Budget Raised to C$275-285M
The 2026 budget was lifted from C$265 million to accommodate long-lead deliveries and a pending multi-rig upgrade for a large Canadian producer contracted through 2029.
Analysis · PDS · Energy & Transportation
Revenue rose 15% to C$532 million and net earnings swung to C$21 million ($1.65 per share) from a loss, with Canadian and U.S. rig counts up 16% and 19%. The bigger swing factor is the newly disclosed CRA reassessment denying intercompany dividend deductions for 2018-2023: Precision puts the maximum exposure at about C$155 million excluding interest, has not booked a liability, and says tax pools push any cash impact to 2024-2027. Management also raised the 2026 capital budget to C$275-285 million and guided U.S. Q4 margins roughly 30% higher sequentially as rig reactivations wind down.
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At the time of this filing, PDS was trading at $98.90 on NYSE in the Energy & Transportation sector, with a market capitalization of approximately $1.3B. The 52-week trading range was $56.10 to $103.80. This filing was assessed with neutral market sentiment and an importance score of 7 out of 10.