Hess Corporation (HES)
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 | 4,703,000 | 4,514,000 | 4,478,000 | 3,794,000 | 3,025,000 | 3,281,000 | 3,420,000 | 4,051,000 | 4,127,000 | 3,759,000 | 3,116,000 | 2,316,000 | 2,089,000 | 1,484,000 | 1,000,000 | 439,000 | -343,000 | -396,000 | -286,000 | 116,000 |
| Interest expense (ttm) | US$ in thousands | 412,000 | 454,000 | 471,000 | 487,000 | 497,000 | 486,000 | 494,000 | 493,000 | 493,000 | 490,000 | 490,000 | 487,000 | 481,000 | 478,000 | 471,000 | 472,000 | 468,000 | 445,000 | 417,000 | 395,000 |
| Interest coverage | 11.42 | 9.94 | 9.51 | 7.79 | 6.09 | 6.75 | 6.92 | 8.22 | 8.37 | 7.67 | 6.36 | 4.76 | 4.34 | 3.10 | 2.12 | 0.93 | -0.73 | -0.89 | -0.69 | 0.29 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $4,703,000K ÷ $412,000K
= 11.42
Hess Corporation's interest coverage ratio has shown a fluctuating trend over the period specified. The interest coverage ratio measures the company's ability to meet its interest payments on outstanding debt. A ratio below 1 indicates that the company is not generating enough operating income to cover its interest expenses.
From March 31, 2020, to June 30, 2021, Hess Corporation had negative interest coverage ratios, indicating significant challenges in meeting its interest obligations. However, starting from September 30, 2021, the company's interest coverage improved significantly, with the ratio steadily increasing to 11.42 by the end of December 31, 2024. This upward trend suggests that Hess Corporation's earnings were sufficient to cover its interest expenses comfortably during this period.
Overall, the improving trend in Hess Corporation's interest coverage ratio indicates a strengthening financial position and a reduced risk of default on its debt obligations. Investors and creditors may view this positive trend favorably as it reflects the company's ability to manage its debt efficiently.
Peer comparison
Dec 31, 2024