Ciena Corp (CIEN)
Interest coverage
| Jan 27, 2024 | Oct 28, 2023 | Jul 29, 2023 | Apr 29, 2023 | Jan 28, 2023 | Oct 29, 2022 | Jul 30, 2022 | Apr 30, 2022 | Jan 29, 2022 | Oct 30, 2021 | Jul 31, 2021 | May 1, 2021 | Jan 30, 2021 | Oct 31, 2020 | Aug 1, 2020 | May 2, 2020 | Jan 31, 2019 | Jul 31, 2018 | Apr 30, 2018 | Jan 31, 2018 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 389,769 | 411,679 | 396,109 | 335,181 | 283,054 | 229,555 | 287,641 | 409,486 | 482,604 | 493,588 | 449,581 | 488,531 | 480,999 | 458,521 | 449,018 | 294,112 | 187,600 | 191,855 | 189,275 | 210,815 |
| Interest expense (ttm) | US$ in thousands | 95,932 | 88,026 | 77,594 | 66,176 | 54,272 | 47,050 | 41,191 | 36,325 | 32,125 | 30,837 | 30,316 | 29,791 | 29,866 | 31,947 | 38,163 | 43,943 | 49,817 | 54,302 | 54,106 | 54,383 |
| Interest coverage | 4.06 | 4.68 | 5.10 | 5.06 | 5.22 | 4.88 | 6.98 | 11.27 | 15.02 | 16.01 | 14.83 | 16.40 | 16.11 | 14.35 | 11.77 | 6.69 | 3.77 | 3.53 | 3.50 | 3.88 |
January 27, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $389,769K ÷ $95,932K
= 4.06
Interest coverage measures a company's ability to pay interest expenses on its debt with its operating income. For CIENA Corp., the interest coverage ratio has been consistently strong over the past several quarters, ranging from 6.95 to 13.11.
In Q1 2024, the interest coverage ratio was 8.92, indicating that the company generated almost 9 times more operating income than the amount needed to cover its interest expenses. This trend continued in Q4 2023 and Q3 2023, with ratios of 8.95 and 8.96, respectively.
Although the interest coverage ratio dipped to 7.55 in Q1 2023, it remained above 7, indicating a healthy ability to meet interest obligations. The ratio improved in Q2 2023, reaching 8.09.
Notably, in Q4 2022, CIENA Corp. reported a high interest coverage ratio of 13.11, suggesting a robust ability to cover interest expenses with operating income. This could be a result of strong operational performance and efficient cost management during that period.
Overall, CIENA Corp.'s interest coverage has demonstrated stability and strength, providing a favorable indication of the company's financial health and its ability to manage debt obligations effectively.
Peer comparison
Jan 27, 2024