Parker Drilling Company (PKD - Snapshot Report) has battened down the hatches for 2015 and 2016 as crude prices continue to be weak. This Zacks Rank #5 (Strong Sell) isn't expected to be profitable either this year or next.

Parker Drilling offers drilling services and rental tools to the energy industry.

Its drilling services serves operators in the inland waters of the Gulf of Mexico by utilizing its own barge rig fleet. The Rental Tools segment provides premium equipment and well services to operators on land and offshore in the US and international markets.

Drilling Revenue Down Again in the Third Quarter

On Nov 3, Parker Drilling reported third quarter results and beat the Zacks Consensus by 2 cents. But it still saw a loss of 10 cents compared to the Zacks Consensus of a loss of 12 cents.

Drilling revenues fell 6.7% to $173.4 million from $185.9 million in the second quarter of 2015. Drilling Services, which is comprised of the U.S. Lower 48, International and Alaska drilling segments, revenue fell just 4.3%.

In Rental Tools, revenue fell 11.4% to $56.8 million from $64.1 million in the second quarter of this year as US drilling weakened further.

Parker says they are managing their business as if the downturn were going to last through all of 2016.

Throughout the year, it has taken steps to generate cash flow including reducing head count, operating expesnes and reducing capital expenditures.

It knows it needs a strong balance sheet to survive the next 12 months until the energy sector makes a turnaround.

"I believe our balanced profile of product and service mix, geographic diversity and backlog are enabling us to perform better than most of our peers," said Gary Rich, President and CEO.

"With our solid balance sheet and prudent management during this downturn, we believe we are positioned to grow once the market environment stabilizes and the outlook improves," he added.

Earnings Getting Crushed

Given the state of the energy market, it's not surprising that Parker's earnings have fallen off a cliff.

It made $0.32 in 2014 but is expected to lose $0.36 this year. That is an earnings decline of 212%.

As Parker admits, its not looking much better for 2016. Analysts expect the company to lose $0.66, which is another 83% earnings decline.

Shares Have Sunk

Like most of the energy stocks, shares have plunged near 2-year lows.

Given the earnings outlook, and that it's a small cap stock which can be volatile, I would warn against being an investor here.

But if you must be in the drilling space, consider one of the bigger players like Diamond Offshore Drilling, Inc. (DO - Analyst Report). It is expected to make $2.63 this year and is still paying its dividend. It's also a Zacks Rank #2 (Buy).