Halliburton Company (HAL)
Interest coverage
| Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 3,822,000 | 3,948,000 | 4,114,000 | 4,093,000 | 4,083,000 | 4,001,000 | 3,810,000 | 3,173,000 | 2,707,000 | 2,281,000 | 1,881,000 | 1,941,000 | 1,800,000 | 1,154,000 | 850,000 | -1,495,000 | -2,436,000 | -3,992,000 | -3,598,000 | -1,384,000 |
| Interest expense (ttm) | US$ in thousands | 450,000 | 655,000 | 635,000 | 641,000 | 606,000 | 366,000 | 366,000 | 347,000 | 375,000 | 409,000 | 432,000 | 451,000 | 469,000 | 486,000 | 492,000 | 496,000 | 505,000 | 521,000 | 540,000 | 560,000 |
| Interest coverage | 8.49 | 6.03 | 6.48 | 6.39 | 6.74 | 10.93 | 10.41 | 9.14 | 7.22 | 5.58 | 4.35 | 4.30 | 3.84 | 2.37 | 1.73 | -3.01 | -4.82 | -7.66 | -6.66 | -2.47 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $3,822,000K ÷ $450,000K
= 8.49
Halliburton Company's interest coverage ratio has shown a volatile trend over the past few years. The interest coverage ratio indicates the company's ability to meet interest payments on its outstanding debt. A higher interest coverage ratio is generally favorable as it signifies that the company is more capable of servicing its interest obligations.
Looking at the data provided, Halliburton's interest coverage ratio was negative in the earlier periods, indicating that the company was not generating enough operating income to cover its interest expenses. However, there has been a gradual improvement in the interest coverage ratio starting from June 2021, where it turned positive and has been increasing since then.
As of December 31, 2024, the interest coverage ratio stood at 8.49, demonstrating a significant improvement compared to the negative ratios seen in the past. This upward trend indicates that Halliburton's operating income is now more than sufficient to cover its interest payments, reflecting a healthier financial position in terms of debt servicing capacity.
Overall, the improving trend in Halliburton's interest coverage ratio suggests that the company's financial health has strengthened over the years, indicating a reduced risk of financial distress due to inadequate interest coverage.
Peer comparison
Dec 31, 2024