Harmonic Inc (HLIT)
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 | 65,259 | 21,472 | -17,554 | 7,283 | 28,278 | 29,949 | 48,907 | 54,163 | 46,751 | 45,515 | 39,249 | 26,156 | 19,606 | 21,806 | 15,674 | 3,840 | -11,024 | -19,812 | 2,978 | 4,907 |
| Interest expense (ttm) | US$ in thousands | 7,326 | 5,404 | 3,337 | 2,713 | 2,696 | 3,054 | 3,719 | 4,313 | 5,040 | 6,817 | 8,219 | 9,455 | 10,625 | 10,656 | 10,777 | 11,209 | 11,509 | 11,561 | 11,754 | 11,648 |
| Interest coverage | 8.91 | 3.97 | -5.26 | 2.68 | 10.49 | 9.81 | 13.15 | 12.56 | 9.28 | 6.68 | 4.78 | 2.77 | 1.85 | 2.05 | 1.45 | 0.34 | -0.96 | -1.71 | 0.25 | 0.42 |
December 31, 2024 calculation
Interest coverage = EBIT (ttm) ÷ Interest expense (ttm)
= $65,259K ÷ $7,326K
= 8.91
Harmonic Inc's interest coverage ratio has exhibited significant volatility over the past few years. The interest coverage ratio measures the company's ability to pay interest expenses on outstanding debt with its operating income. A ratio below 1 indicates that the company is not generating enough operating profit to cover its interest expenses.
From March 31, 2020, to June 30, 2022, Harmonic Inc's interest coverage ratio was consistently below 1, signifying a potential concern regarding its ability to meet interest obligations. However, the ratio improved notably from September 30, 2022, reaching its peak at 13.15 on June 30, 2023. This significant improvement suggests that the company's operating income was more than sufficient to cover its interest expenses during this period.
Subsequently, the interest coverage ratio started to decline, dropping to 2.68 on March 31, 2024, and falling further into negative territory on June 30, 2024, indicating a potential worsening of the company's ability to cover interest costs with operating income.
Overall, while there have been periods of both strength and weakness in Harmonic Inc's interest coverage ratio, it is crucial for investors and creditors to monitor these fluctuations closely to assess the company's financial health and ability to service its debt obligations.
Peer comparison
Dec 31, 2024